The One Big Beautiful Bill Act created “Trump accounts” under Section 530A of the Internal Revenue Code. While many questions remain unanswered, Trump accounts essentially operate as retirement saving accounts for children, somewhat mirroring traditional individual retirement accounts (IRAs) but are subject to distribution restrictions before the beneficiary reaches age 18. The statute enables employers to contribute up to $2,500 annually per employee to the Trump accounts of their employee’s dependents. Employers can begin making contributions on July 4, 2026.
The Internal Revenue Service (IRS) issued limited guidance addressing Trump accounts in Notice 2025-68. A key aspect of that guidance acknowledges that employees can make pre-tax contributions to Trump accounts under Section 128 of the Code through a salary reduction. Notice 2025-68 explains that a Trump account contribution program would be subject to requirements that are similar to dependent care assistance programs established under Section 129 of the Code. These requirements would include nondiscrimination, eligibility, notification and other requirements. Additional guidance is expected in the spring of 2026, and it appears appropriate to wait until the additional guidance is issued before taking any specific action towards making Trump account contributions.
One of the requirements under Section 128 of the Code for a valid employer-provided Trump account contribution is that the employer adopt a “separate written plan.” Although additional guidance may be needed before finalizing a separate written plan document, in light of commentary in the Notice concerning the anticipated requirements of a Trump account contribution program, Section 129 dependent care assistance program plan documents may provide a good starting point for plan sponsors that are considering offering employee pre-tax contributions to Trump accounts.
Plan sponsors contemplating a program for employee contributions to Trump accounts are cautioned to bear in mind that Notice 2025-68 does not address Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Notice indicates that the IRS and the US Department of Labor intend to issue guidance on how to structure Section 128 employer contributions to Trump accounts to ensure that they do not become subject to ERISA. As a result, plan sponsors may wish to postpone taking any further action until such guidance is promulgated.
If you are considering offering Trump accounts or are in the process of designing a Trump account plan document, please contact the authors of this piece or your regular Morgan Lewis contact.
Law clerk Isabella Wetherington contributed to this blog post.