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  • Justin S. Anderson

Who Can Contribute to a Trump Account? Employers, Grandparents, and More

By Justin Anderson, MBA, AAMS, Vice President and Portfolio Manager, Cambridge Advisors Inc. · September 2026

Most coverage of Trump Accounts focuses on parents: how to open an account and how much to contribute. But the accounts can accept money from a much wider circle. According to the IRS, eligible children “may receive deposits from parents, relatives, friends, employers, state governments, philanthropic organizations and individuals, subject to an annual limit.” More than 4 million children had been signed up as of March 31, 2026.1

The source of each deposit matters. Family gifts and employer contributions share an annual limit, while certain government and charitable deposits do not count toward it. The tax treatment also varies. And the rules for employer contributions, which became available this summer, are still being written.

This article reflects guidance available as of September 15, 2026. The employer rules are proposed regulations and could change before they become final.

Who can contribute to a Trump Account?

Parents, grandparents, other relatives, friends, and a parent’s employer can all contribute. Family, friend, and employer contributions share one $5,000 annual limit per child. Up to $2,500 in employer contributions can be excluded from the employee’s taxable income. Certain government and charitable deposits fall outside the $5,000 limit.

  • Parents, grandparents, other relatives, and friends. IRS guidance allows contributions from “the account beneficiary, parents, or any other person.” This is after-tax money, and it counts toward the $5,000 annual limit.2
  • A parent’s employer. An employer can contribute up to $2,500 a year per employee without the contribution being included in the employee’s taxable income. The deposit counts toward the child’s $5,000 limit.2
  • The federal government. A one-time $1,000 pilot deposit is available for U.S. citizen children born from January 1, 2025, through December 31, 2028.3 It does not count toward the annual limit.2
  • States, tribal governments, and charities. These organizations can fund deposits for broad groups, such as all eligible children, children in a particular state or area, or children born in certain years. These deposits also fall outside the annual limit.2

No contributions were allowed before July 4, 2026.2

To open an account, visit the IRS Trump Accounts page, sign in to your IRS account, and submit Form 4547.

How employer contributions work

Section 128 of the tax code allows a business to contribute to Trump Accounts through a separate written program. In August, the Treasury Department and IRS proposed detailed rules for these programs.4 The IRS said the guidance would help employers “that want to make a tax-free contribution of up to $2,500 per year to the Trump Account of an employee or their dependents.”5

The main rules are:

  • Up to $2,500 a year is excluded from the employee’s income. The amount is scheduled to adjust for inflation after 2027.2
  • The limit is per employee, not per child. As the IRS states, “This annual limit is per employee and not per dependent of the employee.” A parent with three children still has one $2,500 tax-free limit.2
  • The money can go to the employee’s account or a dependent’s account.4
  • The contribution appears on the employee’s W-2. Under the proposed rules, employers would report it in box 12 using code TA.4

Some employers may also allow employees to redirect part of their pay through a cafeteria plan. Under the proposed rules, employees could use that option for a dependent’s account, but not for their own.4

Employer contributions are optional. A company must choose to establish a program, so parents should ask their benefits or HR office whether one is available.

The rules remain proposed. Public comments are due September 25, 2026, and a public hearing is scheduled for October 15, 2026.4 Details could change before the regulations become final.

The shared contribution cap

The shared contribution cap is the single $5,000 annual limit that family members, friends, and a parent’s employer draw from for one child’s Trump Account. The $1,000 federal pilot deposit and deposits funded by states, tribal governments, and charities sit outside that limit.2

The limit is easy to miss because contributors may not know what others have already deposited. A grandparent planning a birthday gift, for example, may not know how much the child’s parents or a parent’s employer contributed earlier in the year.

If a parent’s employer contributes $2,500, the child has $2,500 of room left for everyone else combined, including parents, grandparents, aunts, uncles, and friends.

The IRS has also addressed gift tax paperwork for individual contributors. Under a safe harbor issued in June, a cash contribution to a child’s Trump Account generally does not require a gift tax return if, among other conditions, the contributor’s total gifts to that child remain within the annual gift tax exclusion and no return is otherwise required.6

Grandparents and other relatives should ask the parents how much has already gone into the account before making a gift.

Not every dollar is taxed the same way later

The source of a contribution also affects how it is taxed when withdrawn.

After-tax contributions from parents, grandparents, and others create what the tax code calls basis: money that has already been taxed and generally is not taxed again when withdrawn. Employer contributions, the $1,000 pilot deposit, and deposits funded by states, tribal governments, and charities do not create basis in the account, according to IRS guidance.2

Withdrawals generally are not permitted until January 1 of the year the child turns 18. After that, the account generally follows the rules for traditional IRAs.7 Each withdrawal is split proportionally between basis and the rest of the account, and only the basis portion comes out tax-free.2

Knowing the account’s mix of after-tax and taxable money gives the family a clearer picture of the eventual tax bill.

If you own a business

A business needs a separate written plan to offer Trump Account contributions. Under the proposed rules, the program also cannot favor highly compensated employees or their dependents.4

Some owners are not treated as employees for this purpose. The proposed rules exclude partners, sole proprietors, and 2% shareholders of an S corporation.4

The Labor Department has said these programs generally are not retirement plans governed by ERISA, the federal benefits law, if the employer stays out of investment decisions and meets several other conditions.8

Benefits attorneys and tax professionals should handle the plan documents, testing, and reporting. Business owners should understand that the option exists, but that it comes with formal requirements.

What the money can be invested in

Investment choices are limited through the end of the year the child turns 17. Rules proposed in August would allow only mutual funds or ETFs that track an index of primarily U.S. companies, do not use borrowed money to increase exposure, and charge no more than 0.1% in annual fees and expenses. Comments on that proposal are due October 20, 2026.9

How a Trump Account fits a family’s bigger plan

Parents can use a Trump Account to save for a child, while grandparents and other relatives can use it to give. The useful questions are practical: What is the money for? Who else is contributing? How does the gift fit with the contributor’s retirement income and legacy plans?

How family gifts fit into a broader retirement plan is a financial planning question.

If you have questions about how a Trump Account fits your family’s financial plan, start a conversation.

Frequently asked questions

Can grandparents contribute to a Trump Account?

Yes. IRS guidance allows contributions from parents or any other person, including grandparents. Their contributions count toward the child’s $5,000 annual limit, which is shared with other family members, friends, and any employer contributions.

Can my employer contribute to my child’s Trump Account?

Yes, if your employer establishes a written contribution program. Up to $2,500 a year per employee can be excluded from the employee’s taxable income. Employer contributions count toward the child’s $5,000 annual limit. The employer rules are still proposed.

Does the $1,000 government deposit count toward the $5,000 limit?

No. The $1,000 pilot deposit for eligible children born from 2025 through 2028 does not count toward the annual limit.

Are employer contributions taxable?

Up to $2,500 a year is excluded from the employee’s taxable income when contributed. Employer contributions do not create basis in the account, however, so they are taxable when eventually withdrawn.

Can a charity or state contribute to my child’s account?

Yes. States, tribal governments, and charities can fund deposits for broad groups of children, such as all eligible children or children in a particular state or birth year. Those deposits do not count toward the $5,000 limit.

Are the rules for employer contributions final?

No. As of September 15, 2026, they remain proposed regulations. Comments are due September 25, 2026, and a public hearing is scheduled for October 15, 2026, so details may change.

Disclosures

This article is for general educational purposes only and is not individualized investment, tax, or legal advice. Parts of the guidance described here are proposed regulations that may change before they are final. Consult a qualified tax or legal professional about your situation. Cambridge Advisors Inc. is registered with the SEC as an investment adviser; registration does not imply SEC approval or a certain level of skill or training.

Endnotes

  1. Internal Revenue Service, “4 million children have been signed up for Trump Accounts with 1 million claiming the $1,000 pilot program contribution,” IR-2026-42, Mar. 31, 2026. https://www.irs.gov/newsroom/4-million-children-have-been-signed-up-for-trump-accounts-with-1-million-claiming-the-1000-pilot-program-contribution (accessed Sept. 15, 2026)
  2. Internal Revenue Service, Notice 2025-68. https://www.irs.gov/pub/irs-drop/n-25-68.pdf (accessed Sept. 15, 2026)
  3. Internal Revenue Service, “Trump Accounts” (page last reviewed July 7, 2026). https://www.irs.gov/trumpaccounts (accessed Sept. 15, 2026)
  4. U.S. Department of the Treasury and Internal Revenue Service, “Employer Contributions to Trump Accounts and Nondiscrimination Rules for Dependent Care Assistance Programs” (proposed regulations), Federal Register, Aug. 11, 2026. https://www.federalregister.gov/documents/2026/08/11/2026-16314/employer-contributions-to-trump-accounts-and-nondiscrimination-rules-for-dependent-care-assistance (accessed Sept. 15, 2026)
  5. Internal Revenue Service, “Treasury, IRS issue proposed regulations on employer contributions to Trump Accounts,” IR-2026-90, Aug. 11, 2026. https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-employer-contributions-to-trump-accounts-under-the-working-families-tax-cuts (accessed Sept. 15, 2026)
  6. Internal Revenue Service, Revenue Procedure 2026-25, announced in IR-2026-80, June 29, 2026. https://www.irs.gov/pub/irs-drop/rp-26-25.pdf (accessed Sept. 15, 2026)
  7. U.S. Department of the Treasury and Internal Revenue Service, “Trump Accounts” (proposed regulations), Federal Register, Mar. 9, 2026. https://www.federalregister.gov/documents/2026/03/09/2026-04533/trump-accounts (accessed Sept. 15, 2026)
  8. U.S. Department of Labor, Employee Benefits Security Administration, Technical Release 2026-02, June 17, 2026. https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/technical-releases/26-02 (accessed Sept. 15, 2026)
  9. Internal Revenue Service, “Treasury, IRS issue proposed regulations on eligible investments for Trump Accounts,” IR-2026-96, Aug. 20, 2026. https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-eligible-investments-for-trump-accounts-under-the-working-families-tax-cuts (accessed Sept. 15, 2026)