- On December 10, 2025
Summary of Notice 2025-68
On December 2, 2025, the IRS released Notice 2025-68, outlining how forthcoming regulations will apply to the new “Trump Accounts” created under the One Big Beautiful Bill Act (OBBBA). These accounts are designed as tax-advantaged savings vehicles for minors and will first become accessible in 2026. The notice offers an early glimpse into contribution rules, special restrictions during childhood, and how employer-funded contributions will be handled.
Overview of Trump Accounts
Beginning July 4, 2026—one year after OBBBA became law—Trump Accounts may receive contributions. Anyone may contribute, including:
- The child,
- Parents or guardians,
- Extended family members,
- Employers,
- Charitable donors, and
- Any other individual or organization wishing to fund the account.
A federal pilot program will offer a $1,000 government contribution for children born between 2025 and 2028, provided an election is made to participate in the program.
Taxpayers will open the accounts using IRS Form 4547, which will also serve as the application for the pilot program. Beginning in May 2026, the IRS plans to contact individuals who enroll in the program with instructions on authenticating and activating their accounts. A draft of Form 4547 is expected to be released in advance.
How Trump Accounts Function During the Growth Period
The IRS clarified that Trump Accounts will be treated as a type of traditional IRA, but with unique rules while the child is under 18. This childhood phase, referred to as the growth period, spans from a child’s birth to December 31 of the year preceding their 18th birthday.
Example: A child born on October 1, 2025, turns 18 on October 1, 2043; their growth period ends on December 31, 2042. After the growth period closes, standard IRA rules apply unless specifically stated otherwise.
Key Restrictions During the Growth Period
- Investment Limitations: Account assets may only be placed in particular low-cost, broadly diversified index funds. To qualify, a fund generally must:
- Track a U.S.-based equity index (e.g., an S&P 500-type index),
- Avoid leveraged investment strategies,
- Have annual expenses below 0.10%, and
- Meet any additional standards the IRS later develops.
- Annual Contribution Limits: Contributions are capped at $5,000 per year, with cost-of-living increases starting in 2028. Some contributions—such as those from the federal $1,000 pilot program or from public agencies/tax-exempt entities—do not count toward this limit. Contributions are not treated as taxable income to the child.
- Distribution Restrictions: Withdrawals are generally prohibited before the growth period ends, aside from a few narrow exceptions. Once the account transitions into normal IRA status, distributions are governed by traditional IRA rules, including possible 10% early-withdrawal penalties unless an exception applies (such as higher-education expenses or first-time home purchases).
- Reporting obligations: During the growth period, additional reporting is required under IRC §530A(i), including details about who contributed to the account. After age 18, standard IRA reporting under IRC §408(i) applies.
Employer-Funded Contributions
Employers may fund a Trump Account for an employee’s or a team member’s qualifying dependent under a Section 128(c) Trump Account Contribution Program. Contributions made under this type of program:
- Are excluded from the employee’s taxable income,
- Are capped at $2,500 per employee per year (indexed after 2027), and
- Must be offered through a formal written plan that satisfies nondiscrimination, eligibility, benefit, and notice rules similar to those governing dependent care assistance programs.
Additional Rules for Employer Contributions
Notice 2025-68 highlights several administrative requirements:
- The annual limit applies per employee, not per child. If an employee has multiple eligible dependents, the employee’s total contributions across all accounts still cannot exceed $2,500 for that year.
- The employer must inform the account trustee that a contribution is being made under Section 128, allowing it to be treated as tax-free to the employee.
- Salary-reduction contributions through a Section 125 cafeteria plan are allowed when the money funds a dependent’s Trump Account—but not when the employee contributes to their own Trump Account.
What Comes Next
The IRS and Treasury Department expect to issue proposed regulations covering additional technical aspects, including how Trump Account programs interact with cafeteria plans. Employers interested in offering contributions should stay alert for these upcoming rules, which will provide more details on implementation.
General information about Trump Accounts is available on trumpaccounts.gov.