Treasury defines operating framework for new Trump accounts
Executive summary: What Treasury’s proposed Trump account rules mean for families and institutions
Treasury guidance defining the operating framework of Trump accounts gives families, financial institutions and employers their clearest sense yet of how the child-savings arrangement is intended to function and what operational, compliance and planning obligations will follow. The guidance sets early expectations for enrollment pathways, trustee responsibilities and the timing of federal contributions for eligible children born between 2025 and 2028.
The framework offers structure but also exposes unresolved areas, including employer‑sponsored programs, administrative standards during the “growth period,” and potential gift tax and transfer tax implications for contributors.
As Treasury continues refining the rules, families and institutions will need to assess how these emerging requirements affect account administration, investment limitations and long‑term planning. With several provisions reserved for future guidance, stakeholders should prepare for continued updates as the regulatory model takes shape ahead of the program’s 2026 effective date.
Proposed regulations for new Trump accounts offer families, financial institutions and employers the first substantial framework for how these child‑focused savings vehicles will be opened, administered and funded.
The U.S. Department of the Treasury and the IRS issued two notices of proposed rulemaking (NPRMs) that outline who may act on a child’s behalf to establish accounts, how elections must be made, and how the $1,000 pilot‑program contribution will work. Many operational rules are reserved for future guidance.
The two NPRMs serve distinct purposes.
- REG‑117270‑25 sets forth rules for establishing Trump accounts and provides a number of definitions.
- REG‑117002‑25 addresses the mechanics of the one‑time $1,000 federal contribution available for children born from 2025 through 2028 under the Trump Accounts Contribution Pilot Program.
Both sets of proposed regulations would apply for taxable years beginning on or after Jan. 1, 2026. The NPRMs follow Notice 2025‑68, which addressed certain initial questions related to Trump accounts and solicited public comments on initial implementation questions.
This article summarizes some of the key provisions in the NPRMs and remaining open questions not addressed in this guidance.
Background: Trump accounts rules
Trump accounts were enacted under the One Big Beautiful Bill Act, introduced under new section 530A. These accounts provide a special type of traditional individual retirement account (IRA) intended to promote wealth building for children.
The Trump account program allows contributions (up to a stated amount, currently up to $5,000) from individuals (such as family members) and employers. In certain cases, charities or governments can make broad-based contributions that will not be counted towards the $5,000 annual limit.
A more limited Trump account “pilot” program additionally provides a $1,000 contribution from the federal government to Trump Accounts of children born between 2025–2028.
As a general rule, Trump accounts cannot distribute amounts during the “growth period,” which begins when the account is established and ends after the year the child turns 17. Beginning at age 18, distributions may be used for limited purposes, such as for tuition or buying a house.
Trump accounts are also limited to certain types of broad-based investments and may not use leverage. The account fees must be below a stated percentage.
Proposed regulations on establishing Trump accounts
The first NPRM focuses on the foundational rules for opening an initial Trump account for an eligible individual.An eligible individual is a child who has not yet attained age 18, has been issued a Social Security number, and for whom a valid Trump account election is made.
The regulations establish a framework for an “authorized individual” to open an account on a child’s behalf.
If a pilot program election for the $1,000 contribution is made at the same time, the authorized individual is the person making that pilot program election (generally a parent or guardian who anticipates claiming the child as a qualifying child).
When no pilot program election is involved, the proposed regulations adopt a priority ordering similar to ABLE account rules:
- Legal guardian
- Parent
- Adult sibling
- Grandparent
A Trump account is a traditional IRA with special statutory restrictions. Among other rules:
- The account must be designated and titled as a Trump account at inception; existing IRAs cannot be converted into Trump accounts.
- An individual may have only one Trump account holding funds at a time. A Trump account may be rolled over to another trust, but because the child can only have one Trump account, the full amount in the Trump account must be rolled over to the new Trump account. The regulations provide that to be qualified, the rollover must be accomplished by a trustee-to-trustee transfer.
- Trump accounts cannot be SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Account) and cannot receive simplified employee pension (SEP) contributions.
- Nonbank trustees approved to administer IRAs as of Dec. 31, 2025, are automatically approved to act as Trump account trustees; later applicants must seek specific approval.
RSM insight: Trump accounts framework coming into view
Treasury’s rejection of an automatic or “optout” enrollment system is a significant policy decision reflected in the guidance. Treasury provides that the disclosure restrictions of section 6103 make it impracticable to use tax return or government data to automatically open individual Trump accounts. As a result, families must affirmatively elect to open accounts. The deemed election rule provides important protection against procedural missteps but does not replace the need for proactive enrollment.
The NPRM also signals potential expansion of who may serve as a Trump account trustee. IRAs can generally be held only by banks or non-bank trustees. Non-bank trustees have to apply to the IRS for approval to be IRA trustees and must satisfy a number of requirements.
Treasury and the IRS specifically request comments on relaxing certain nonbank trustee standards, including net worth and fiduciary experience requirements, and on expanding the categories of governmental entities that may serve as trustees.
Finally, the guidance expressly reserves future regulations governing the most complex aspects of Trump accounts, including contributions, investments, distributions, and reporting during the “growth period.”
Proposed regulations on the $1,000 pilot program
The second NPRM implements the Trump Accounts Contribution Pilot Program under new section 6434, which provides a one‑time $1,000 government contribution to the Trump account of an eligible child.
The pilot program election is made by a parent or guardian on Form 4547 or through the online portal. For a child born during 2025–2028, an election to set up a Trump IRA may be made from the date the child becomes eligible through Dec. 31 of the year the child turns 17, though most families would want to make the election earlier so that the Trump account balance can grow over time.
The regulation clarifies that the amount can be deposited shortly after birth, maximizing potential investment growth.
RSM insight: Unanswered questions about Trump accounts
Treasury has adopted a clear opt‑in model, with Form 4547 and a dedicated online portal serving as the primary entry points. While the guidance addresses threshold questions about account creation and the pilot contribution, many operational rules remain reserved.
Notably, the guidance does not address gift and generation skipping-transfer tax implications of contributing to Trump accounts. There is concern that a contribution to a Trump account may be a gift of a future interest that does not qualify for the gift tax annual exclusion and, if so, individuals making contributions to Trump accounts may be required to file a gift tax return.
Tax professionals, families, and financial institutions should view this guidance as the foundation of a broader regulatory regime and monitor future developments closely.
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