Families now have a clearer path for opening Trump Accounts, but the planning details are becoming more important. As we covered in our earlier article, Introducing the Trump Savings Account: What Families Need to Know, Trump Accounts are a new tax-deferred savings vehicle for children. They are structured as a type of traditional IRA under IRC §530A, with special rules during the child’s “growth period” before the year they turn 18.
The latest update: the IRS has begun allowing taxpayers to view and submit Trump Account elections through their IRS Individual Account. Families can now submit Form 4547, Trump Account Election(s), electronically and check the status of previously submitted elections. The IRS also directs families to its Trump Accounts page to get started.
That is a meaningful administrative step as the July 4, 2026 contribution start date approaches. More guidance is expected before rollout, and families, employers, and owner-employees should be careful not to treat these accounts as “simple” child savings accounts without reviewing the tax reporting and employer-benefit rules.
Gift tax reporting may surprise families
For 2026, the annual gift tax exclusion remains $19,000 per recipient. Upon launch, a practical concern for Trump Account contributions emerged because the annual exclusion generally applies to gifts of a present interest, not future interests, under IRC §2503(b). During the growth period, Trump Accounts generally restrict distributions before the year in which the child turns 18, which created uncertainty over whether individual contributions would need to be reported on Form 709 even when no gift tax was ultimately due.
Treasury and the IRS have now provided targeted relief. Under Rev. Proc. 2026-25, certain individual donors may rely on a transfer tax safe harbor that treats qualifying Trump Account contributions as completed gifts that are not future interests and to which the annual exclusion applies. If the safe harbor requirements are met for the year, the donor is not required to file a gift tax return solely to report those Trump Account contributions.
The relief is helpful, but it is not automatic for every donor. Among other requirements, the donor must be an individual, the contributions must be cash contributions to Trump Accounts made before the calendar year in which the beneficiary turns 18, the donor’s total gifts to each beneficiary for the year must not exceed the annual exclusion amount, and the donor must not otherwise be required to file, or choose to file, a gift tax return for that year. If the donor makes other reportable gifts, exceeds the annual exclusion for a beneficiary, needs to allocate GST exemption, or has another Form 709 filing reason, the safe harbor may not eliminate reporting.
The practical planning point has changed from “assume reporting may be required” to “confirm whether the safe harbor applies before deciding no Form 709 is needed.” Families should still track contributions by donor, beneficiary, year, and source of funds, especially where grandparents, multiple family members, or high-net-worth transfer tax planning are involved. For many routine cash contributions within the annual exclusion, the new guidance should reduce filing friction. For larger estate, gift, and GST planning situations, the contribution should still be coordinated with the family’s broader transfer tax reporting position.
S-corp owners may have a planning opportunity, but structure matters
Trump Accounts also create a potential employer-benefit planning opportunity for S-corporation owner-employees.
Under IRC §128, an employer may contribute to a Trump Account for an employee or the employee’s dependent through a qualifying written program. Employer contributions up to $2,500 per employee annually are generally excluded from the employee’s gross income. For an S-corp owner who is also a W-2 employee and has a child with a Trump Account, this could create a layered planning result:
- The S-corp may be able to deduct the employer benefit expense.
- The owner-employee may exclude the contribution from W-2 wages.
- The child receives funds that can grow tax-deferred inside the Trump Account.
The limitation is equally important: the $2,500 exclusion is per employee, not per child. If an owner-employee has multiple children with Trump Accounts, the employer contribution limit generally must be allocated among those children.
This is not a shareholder distribution with a new label. Employer contributions generally need a separate written Trump Account contribution program, benefit-plan documentation, and clear records identifying the payment as a §128 employer contribution. Payroll coordination will also matter.
One unresolved area practitioners are watching is how the 2% S-corp shareholder fringe benefit rules will apply. Many benefits that are tax-favored for rank-and-file employees receive different treatment when provided to more-than-2% S-corp shareholders. Until the IRS provides more payroll and fringe benefit guidance, S-corp owners should approach this strategy thoughtfully.
What families should do now
Families do not need to rush into contributions before the rules are fully operational. Contributions cannot begin before July 4, 2026. In the meantime, the most practical steps are to confirm eligibility, gather Social Security number and dependent information, submit or track Form 4547 through the IRS process, and coordinate with advisors before funding the account.
For business owners, now is the right time to evaluate whether a written employer program makes sense, how it would be administered, whether it should cover employees broadly, and how payroll reporting may work once further guidance is released.
How Aura Advisors can help with Trump Accounts
Trump Accounts may become a useful part of a family’s long-term savings and wealth-transfer strategy, but the details matter. The online Form 4547 process makes account opening easier, while the gift tax and employer-contribution rules make planning more nuanced.
Aura Advisors can help families evaluate whether Trump Accounts fit alongside 529 plans, custodial accounts, estate planning vehicles, and broader gifting strategies. For S-corp owners, we can help assess whether an employer contribution program is worth exploring, what documentation should be in place, and where unresolved IRS guidance creates risk. As more information is released before the July 4, 2026 rollout, a defensible approach will be the best one: understand the opportunity, document the purpose, and make decisions based on your specific facts.
For more reading:
- Introducing the Trump Savings Account: What Families Need to Know
- OBBBA’s Impact on Education Savings Plans
- Important Tax Filing Deadlines for 2026
Aura Advisors is a boutique tax consulting and compliance firm working with start-ups, emerging growth companies, and affluent individuals. Making it safer for good people and good companies to continue to do good things.