The U.S. Treasury Department announced new guidance Tuesday, August 11, 2026, permitting employers to contribute up to $2,500 annually to "Trump Accounts" for their employees or their dependent children, with these contributions excluded from the employee's taxable income. This move by the Trump administration is designed to expand avenues for American families to build long-term financial stability and wealth for their children.
"Trump Accounts are giving American families a new way to build wealth from day one." — Scott Bessent, Treasury Secretary.
Trump Accounts, established under President Donald Trump’s Working Families Tax Cuts, are long-term investment accounts specifically designed for children. Parents, guardians, or other authorized individuals are eligible to establish an account for a child before the calendar year in which the child turns 18. These accounts allow for funds to be invested rather than held as cash, typically in qualifying mutual funds or exchange-traded funds that track the S&P 500 or another qualifying index primarily composed of U.S. companies.
Treasury Secretary Scott Bessent articulated the administration's vision for these changes, stating, “Trump Accounts are giving American families a new way to build wealth from day one.” He further clarified that the new guidance facilitates employer contributions of up to $2,500 tax-free each year for employees’ dependents. Additionally, the guidance enables workers to direct pre-tax money from their paychecks directly into these accounts for their dependents, further enhancing savings opportunities.
Under the program, individuals and employers can generally contribute a combined total of up to $5,000 per year to a child’s Trump Account. The employer contributions, up to $2,500, count towards this overall annual limit but are excludable from an employee’s taxable income, provided specific program requirements are met. The annual contribution limits are scheduled to be adjusted for inflation starting after 2027, ensuring the program's long-term relevance and value.
Beyond employer and individual contributions, the program offers an additional federal benefit for certain younger children. Eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, can receive a one-time $1,000 contribution from the federal government. This occurs after an election is made to establish a Trump Account for them, and importantly, this government contribution does not count toward the standard $5,000 annual contribution limit.
The Treasury Department's new guidance particularly focuses on broadening employer participation in the Trump Account program. To establish a contribution program, employers will generally need to maintain a separate written plan, provide notices and annual statements to participating employees, and fulfill reporting obligations to the trustee overseeing the Trump Account. While companies can typically rely on workers to certify a beneficiary’s age and dependent status, they must ensure that all contributions are directed to qualifying Trump Accounts.
The announcement has already garnered significant interest from the private sector. The Treasury Department reported that more than 50 companies have committed to making contributions to Trump Accounts for their employees. Several major companies have also publicly announced their plans to provide matches or other contributions. Chime CEO Chris Britt stated that the financial technology company intends to provide an employee match for Trump Accounts. Franklin Templeton plans to match the federal government’s one-time $1,000 contribution for eligible children of its U.S. employees, with State Street announcing a similar initiative for eligible children of its active workers. Vanguard plans to allow employees, beginning in 2027, to direct a $1,500 employer contribution from an existing benefits program into an eligible Trump Account. Visa also intends to offer eligible U.S. employees a company match corresponding to the government’s one-time $1,000 contribution.
The Treasury Department emphasized that the new guidance is strategically designed to simplify the process for additional businesses to participate, thereby providing families with another tax-advantaged mechanism for investing in their children’s futures.
