Trump Account Employer Contribution Guidance Released

A proposed rule by the Department of Treasury and IRS addressing Trump account employer contributions and associated nondiscrimination testing requirements has been released. One of the features of Trump accounts passed into law last year under the One Big Beautiful Bill Act, is the ability for employers to make Section 125 employer contributions up to $2,500 (indexed) to a Trump account established for an employee or their dependent, under a separate written plan of the employer. Previously released IRS Notice 2025-68 provided initial guidance on Trump accounts and indicated the agencies' intent to issue proposed regulations.

Among other things, the proposed rule provides details to ensure that 1) the contributions and benefits do not discriminate in favor of highly compensated employees, 2) eligibility classification for the program is reasonably based on objective criteria, and 3) the classification must be nondiscriminatory. The proposal also prescribes how any failures can be corrected. Additionally, the proposed rule provides a safe harbor for contributions made with respect to pilot program amounts. And finally, the rule provides guidance on nondiscrimination requirements with respect to dependent care assistance programs.

The proposed regulations would apply to plan years beginning on or after the date final regulations are published in the Federal Register. However, taxpayers may rely on the proposed regulations for earlier plan years. Comments can be submitted within 45 days of publication in the Federal Register. A public hearing is also scheduled to be held on October 15, 2026.