IRS Issues Initial Guidance on Trump Accounts

In Kevin and Shifra’s article “IRS Issues Initial Guidance on Trump Accounts,” they explore Notice 2025-68, which provides some initial parameters to Trump accounts. Kevin and his co-author explain eligibility, the priority of the “responsible party,” and the election process via IRS Form 4547 or a planned online tool. They identify five contribution types within a general $5,000 annual cap (indexed after 2027), with exceptions for specific exempt contributions. Key features include a one-time $1,000 federal pilot deposit for children born 2025–2028, class-based gifts by governments and charities, and employer programs contributing up to $2,500 per employee each year.

Kevin and his co-author outline that contributions are not income tax-deductible, and earnings grow tax-deferred; however, they are taxable to the extent they exceed the basis. They highlight unresolved gift tax issues that may require the use of the lifetime exemption, GST planning, and potential gift tax return filings. Operationally, they describe a “growth period” until age 18, characterized by strict investment limits, prohibitions on cash and money market funds, and largely barred distributions. After the growth period, most IRA rules apply, with some Trump account–specific differences and the potential for a rollover to a traditional IRA.

Find the full article here.