The landscape of employer-sponsored benefits is poised for a significant shift in the summer of 2026. The ability to offer family-oriented financial benefits has become a key differentiator for employers, and a new savings vehicle, known as “Trump Accounts,” will soon enter the conversation.
Established under the One Big Beautiful Bill Act (OBBBA), these accounts create a new opportunity for employers to support the long-term financial health of their employees’ families. However, as with any new benefit, employers should evaluate how Trump Accounts fit within their broader total rewards strategy.
What Is a Trump Account?
A Trump Account is a savings vehicle designed specifically for children. It functions similarly to a traditional individual retirement account (IRA) but is established by a parent or guardian for a child who has a valid Social Security number. To be eligible, the beneficiary must be a U.S. citizen under the age of 18.
While employers can fund these accounts, the parent or guardian is responsible for opening the account and must file the necessary forms with the IRS or through the designated government portal.
The account structure allows for a total annual contribution of up to $5,000. This cap is adjusted for inflation and includes funds from all sources — whether they come from parents, private donors, the government, or employers.
Implementing a Trump Account Contribution Program
Employers cannot simply write a check to an employee’s child. Participation requires establishing a formal structure known as a Trump Account Contribution Program (TACP). This written plan must outline eligibility, contribution methodology, and administrative procedures.
Contribution Limits, Structure, and Methods
Employer contributions are limited to $2,500 per year per employee — not per child. For example, if an employee has three children with active Trump Accounts, the employer may contribute up to $2,500 total across those accounts for that employee in a given year.
There are two primary avenues for facilitating these contributions under a TACP:
- Direct Contributions: The employer can contribute funds directly to the account. These funds can be designated for the employee’s dependents. Importantly, these employer contributions are generally excludable from the employee’s gross income, offering a tax-efficient way to provide additional compensation.
- Cafeteria Plans (Section 125): Alternatively, employers may allow employees to reduce their salaries to make pre-tax contributions. Under this arrangement, employees can elect to direct a portion of their pre-tax income into their dependent child’s account.
Both the direct employer contribution and the employee’s pre-tax salary reduction count toward the $2,500 annual employer limit.
Trump Account Federal Pilot Project
To encourage early participation, the federal government has launched a pilot project running from 2025 through 2028. Under this pilot program, the federal government will make a one-time $1,000 contribution to Trump Accounts established for children born between Jan. 1, 2025, and Dec. 31, 2028.
This incentive may encourage employees to open accounts early, positioning families to receive both government and potential employer contributions once TACPs become active in July 2026.
Evaluating Fit: Considerations and Limitations
While Trump Accounts may appeal to employers seeking to expand family-focused benefits, they are subject to important limitations. Investment options are restricted to certain approved arrangements, which may limit flexibility compared to other long-term savings vehicles.
Additionally, employers should consider how these accounts compare to existing options already available to employees. For some families, a Section 529 education savings plan may offer greater flexibility or alignment with anticipated financial goals, particularly when education funding is the primary objective.
Rather than viewing Trump Accounts as a replacement for existing savings programs, employers may find greater value in considering how they complement current retirement, education, and family-focused benefit offerings.
Preparing Your Organization for Trump Accounts
Trump Accounts introduce a new way for employers to support employees’ families and long-term financial wellbeing. Beginning July 4, 2026, organizations will have the opportunity to formalize contributions through a Trump Account Contribution Program (TACP), but participation should be intentional.
With additional regulatory guidance still forthcoming, now is the time to evaluate if this new option fits into your broader benefits framework.
Ready to learn more about Trump Accounts? Consult with legal counsel or connect with our team at CBIZ to see if this savings vehicle makes sense for your organization’s total rewards strategy.
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