In July 2025, the government passed a massive bill (“The One Big Beautiful Bill”). The bill made sweeping changes like no tax on overtime and no tax on tips. It also established “Trump Accounts” for children.
- Trump Accounts are investment accounts for children under 18; eligible births 2025-2028 receive a one-time $1,000 government deposit.
- Parents can contribute up to $5,000 per year starting July 4, 2026; employers may contribute up to $2,500 annually, counted toward the $5,000 limit.
- Employer contributions require a written plan, nondiscrimination testing, employee notice, and reporting on Form W-2 box 12 using code TA.
Employers can contribute to an employee’s Trump Account, up to a limit, and report the contributions on Form W-2. So what is a Trump Account, and what should employers know?
What are “Trump Accounts?”
A Trump Account is an investment account for children under 18 who have a Social Security number. The government will provide an initial $1,000 deposit for children born after December 31, 2024 and before January 1, 2029.
Children under 18 not born during this time can still have accounts, but they won’t be eligible for the $1,000 government deposit.
Parents can contribute to their child’s account, up to a maximum of $5,000 per year, beginning July 4, 2026. The account works similarly to an IRA after the child turns 18.
Trump Accounts eligibility: Who gets one?
Children are eligible for a Trump Account if they are:
- U.S. citizens with a Social Security number
- Under 18
Additionally, children born between 2025 and 2028 receive a one-time government deposit of $1,000.
How much will the account be worth?
The U.S. government estimates that, under a scenario of average returns on the U.S. stock market, an account with only the initial $1,000 contribution will be worth $5,800 by age 18 and $18,100 by age 28.
The government estimates that the account will have $303,800 by age 18 and $1,091,900 by age 28 if maximum contributions are made.
Can employers contribute to an employee’s Trump Account?
Yes, employers can contribute up to $2,500 annually to employees’ Trump Accounts. This $2,500 limit is excludable from the employee’s gross income.
You can contribute to both your employees’ dependents’ accounts and accounts of your employees who are under 18.
Employer contributions count toward the total $5,000 annual limit.
Keep in mind that employer contributions are not required. If you decide to contribute to Trump Accounts for your employees, you must:
- Provide a separate written plan
- Ensure the plan doesn’t favor highly compensated employees and pass nondiscrimination testing
- Notify employees about the available program
Report contributions on Form W-2 in box 12 using code TA.
Should you add Trump Account contributions to benefits?
What do employers think about the possible new employee benefit? According to a recent survey gauging employer interest:
- 70% do not want to offer the benefit
- 18% were interested
- 12% didn’t know it existed
Many employers said the benefit either doesn’t apply to their employees or would be unfair to other employees. Others said there isn’t enough guidance and detailed information yet.
On the other hand, the benefit could be a good choice for employers looking to add a new pre-tax option to the mix.
Other benefits you may consider
Choosing employee benefits can be challenging, especially if funds are tight. Other benefits you may consider include:
- 401(k) plans
- Health insurance
- Educational assistance
- Commuter benefits
Trump Account FAQs
Children under the age of 18 who have a Social Security number qualify for a Trump Account.
Children born between 2025 and 2028 receive a one-time government deposit of $1,000. Parent contributions began July 4, 2026.
Contributors can contribute up to $5,000 annually.
Only babies born after December 31, 2024 and before January 1, 2029 receive an initial $1,000 contribution from the government.
Yes, employers can contribute up to $2,500 annually to their employees’ Trump Accounts. The $2,500 counts toward the $5,000 maximum contribution limit.
Report contributions on Form W-2 in box 12 using code TA.
This article has been updated from its original publication date of September 5, 2025.
This is not intended as legal advice; for more information, please click here.
