Updated
Updated · CNBC · Aug 11
Treasury, IRS Propose Trump Account Rules Allowing $2,500 Tax-Free Employer Contributions
Updated
Updated · CNBC · Aug 11

Treasury, IRS Propose Trump Account Rules Allowing $2,500 Tax-Free Employer Contributions

3 articles · Updated · CNBC · Aug 11

Summary

  • Treasury and the IRS issued proposed rules spelling out how employers can fund children's Trump Accounts, letting companies contribute up to $2,500 a year per worker's dependent without counting it as employee income.
  • Employees could also direct pretax payroll deductions into their dependent children's accounts, giving employers a clearer administrative and compliance framework before rules are finalized after public comment and an October hearing.
  • Trump Accounts are open to U.S. children under 18 with Social Security numbers, while children born from 2025 through 2028 can receive a one-time $1,000 Treasury deposit under a pilot program.
  • About 7 million children have been signed up so far, Treasury says, and more than 50 companies have already committed contributions even though an April Mercer poll found only 4% of employers expected to offer such programs in 2026 or 2027.

Insights

Could the new tax-free payroll deductions for children's savings eventually make traditional 529 education plans obsolete for modern families?
Will complex compliance rules prevent your employer from offering the newly proposed $2,500 payroll deductions for your child's savings account?
How will mandatory index fund restrictions on these new youth savings accounts impact the long-term wealth building of the next generation?