Earlier this year, the CHRO Association wrote to the U.S. Department of the Treasury on behalf of our member companies, asking for clear rules on employer contributions to Trump Accounts. This week, the Treasury and the IRS issued proposed regulations that answered many of our questions.
This is a direct win for our advocacy work on behalf of our members and it’s worth understanding closely, since several large employers are already moving on it.
What the guidance allows:
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Employers can contribute up to $2,500 per year, tax-free. This is capped per employee (not per child) and a worker with multiple children does not receive a separate $2,500 exclusion for each child.
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Employees can make pre-tax contributions to a dependent’s Trump Account through a Section 125 cafeteria plan, but they cannot use those funds toward their own retirement accounts, such as an IRA.
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Total contributions (employee or employer) cap at $5,000 per year, per child.
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Any U.S. child under 18 with a Social Security number is eligible; children born 2025–2028 may also receive a one-time $1,000 federal seed deposit.
To offer a compliant program employers need:
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A written plan document for the program.
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A self-certification of dependent/age status, while verifying the receiving account is an actual Trump Account.
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Collected employee notices and annual statements.
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A record of contributions to the Trump Account trustee.
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Compliance with nondiscrimination rules protecting against bias toward highly compensated employees.
One catch: Payroll infrastructure hasn’t fully caught up yet. For instance, the IRS hasn’t set a W-2 reporting line yet, so early adopters will need manual workarounds.
What’s next: This is proposed, not final guidance. Treasury and the IRS are requesting comments by September 25 with a hearing October 15. Final rules will follow after that point. CHRO Association will submit formal comments, and we welcome member input!
