Following its issuance of Notice 2025-68 in December to provide preliminary guidance, the IRS has issued two sets of proposed regulations, effective Jan. 1, 2026, regarding new IRC Section 530A Trump Accounts. One set provides guidance specific to the election to open a Trump Account, and the other addresses the Trump Accounts Pilot Program. The Preambles specify that additional proposed regulations will be forthcoming to provide guidance regarding additional aspects.

Trump Accounts in general under IRC Section 530A and IRS Notice 2025-68:

Established as part of the One Big Beautiful Bill Act, Trump Accounts are traditional IRAs established for individuals who have not attained age 18 and who have a Social Security Number. Trump Accounts are intended to promote tax-favorable savings and investment beginning in childhood. During the period that ends before January 1 of the calendar year in which the individual attains age 18 (“Growth Period”), at which point the regular traditional IRA rules will apply, the following special rules will be applicable:

• Contributions - The earliest a contribution can be made to a Trump Account will be July 4, 2026. There will be a $5,000 (subject to COLA increases after 2027) maximum contribution per year, including both contributions made by parents and/or relatives, and new IRS Section 128 employer contributions (limited to $2,500 per employee per year (COLA adjusted after 2027), and non-taxable to the employee). No earned income requirement will apply for contributions, the individual for whom the Trump Account is established will generally not be taxable on contributions made to their Trump Account, and contributions made by individuals to Trump Accounts will not be tax-deductible.
• Pilot Program - Under the Trump Accounts Pilot Program, an election for a $1,000 one-time Pilot Program contribution to be made by the government under IRC Section 6434(a) will not count towards the annual limit. Under the Pilot Program, the government will establish and fund a Trump Account for children born after 2024 and before 2029 who are U.S. citizens with a Social Security Number. A Trump Account established under the Pilot Program will be able to be subsequently rolled over in a trustee-to-trustee transfer to a rollover Trump Account to which other contributions can be made by family members and employers under IRC Section 128.
• Investments - Trump Accounts will only be permitted to be invested in a mutual fund or exchange traded fund that tracks an index of primarily U.S. companies (e.g., an S&P fund), does not utilize leverage, and does not have annual fees and expenses in excess of 0.1% of the amount invested.
• Distributions - Generally, non-rollover distributions from Trump Accounts will not be permitted during the Growth Period. When permissibly made, distributions in excess of basis (i.e., contribution amounts) will be taxable; however, Pilot Program contributions and employer contributions under IRC Section 128 will not generate basis. Trump Accounts will not be combined with non-Trump Account IRAs for taxation of distributions purposes.

Highlights of the proposed regulations:

• At the time of its establishment, the IRA must have the title of “Trump Account”.
• Only one election can be made to initially establish a Trump Account, either by the Secretary of the Treasury where the covered individual is eligible for the Pilot Program, or, where that is not the case, by an “authorized individual” as determined in the following order: legal guardian, parent, adult sibling, or grandparent (where there is more than one individual at the appropriate level (e.g., grandparents)), any such individual can elect. (Somewhat oddly, if an individual who was not such an “authorized individual” makes the election, the election will be deemed to have been made by the Secretary, and the IRA will be considered to be a Trump Account.) The “authorized individual” will also have the responsibility to select the applicable investments, and to provide for a subsequent rollover (in a trustee-to-trustee transfer) to a rollover Trump Account.
• The election will be required to be made by utilizing either IRS Form 4547 (“Trump Account Elections”) or an electronic application or web page to be made available by the Secretary.
• Clarification that a Trump Account cannot be an IRC Section 408(p) SIMPLE IRA or an IRC Section 408(b) individual retirement annuity, and that a Trump Account cannot accept contributions from an employer’s IRC Section 408(k) SEP-IRA plan.
• An individual is permitted to have solely one Trump Account holding funds at any time.
• As both a Trump Account and a traditional IRA, the governing documents must provide for both sets of rules (i.e., those applicable during and after the Trump Account Growth Period).
• Any entity approved by the IRS as of Dec. 31, 2025, to act as an IRA nonbank trustee will automatically be approved to act as a Trump Account trustee, whereas others will be required to request IRS approval.
• Various defined terms applicable to Trump Accounts are provided. For example, while the concept has not changed, the definition of “growth period” is expressed somewhat differently than under IRC Section 530A (“the period before the first day of the calendar year in which the account beneficiary attains age 18”), as the period beginning on the date the Trump Account is initially established and ending on Dec. 31 of the year in which the covered individual attains the age of 17.
• To receive the $1,000 Pilot Program election contribution to be made by the Secretary for an eligible child’s Trump Account, a Pilot Program election must be made by an individual with respect to whom the eligible child is the individual’s IRC Section 152(c) “qualifying child” for the tax year in which the Pilot Program election is made.
• Where a Pilot Program election is made, the eligible child will be treated as having made a $1,000 federal income tax payment, which will result in a $1,000 overpayment and a corresponding refund by the Secretary of that amount in the form of a Pilot Program Contribution to their Trump Account.
• Clarification that the last day that a Pilot Program election can be made will be Dec. 31 of the calendar year in which the eligible child attains the age of 17.

What does CohnReznick think?

The newly issued Proposed Regulations are fairly general, and they do not provide much new information from the rules and requirements already in place under IRC Section 530A. In the Preambles, the IRS advises that additional guidance will be provided separately regarding various related Trump Account issues, including definitions, IRC Section 128 employer contributions, written requirements for governing documents, contributions, investments, and distributions. As always, public comments are requested. It will be interesting to see the extent to which the IRS issues guidance, if any, in connection with the Trump Account contributions being offered by various wealthy individuals to certain children.