Employers Can Now Fund Your Kid’s Trump Account. Here’s What That Means for You

KEY TAKEAWAYS

• Parents can sign their child up for a Trump Account, which converts to a traditional IRA when the child turns 18.
• Employers can contribute up to $2,500 a year to the Trump Accounts of their workers’ dependent children.
• Employees may also fund their children’s accounts with pretax dollars through an employer plan.

Your employer’s benefits package could now include money for your child’s Trump Account.

More than 50 companies, including major organizations such as ADP, Chime, and Edward Jones, have committed to automatically contributing to their employees’ Trump Accounts.1 The Treasury Department issued guidance this week allowing employers to contribute directly to accounts opened for workers’ dependent children.

Employers can contribute up to $2,500 a year, and qualifying contributions won’t count toward an employee’s taxable income. Employer contributions to Trump Accounts do count toward the $5,000 annual contribution limit.

Why This Matters

Workplace benefits often target just the employee—a 401(k) match, maybe tuition help. Employer contributions could let families put more money into a child’s account without taking the full amount out of their own after-tax pay.

The guidance announced by the Treasury Department also lets employers allow employees to fund their children’s accounts with pretax dollars through an employer cafeteria plan.

Individual contributions to Trump Accounts aren’t tax-deductible. Money for a cafeteria plan, though, comes out of a paycheck before taxes, lowering both the worker’s taxable income and their tax bill.2

Trump Accounts were created through the One Big, Beautiful Bill Act of 2025 and opened this summer. Still, the rules are a proposal, not final. Treasury is taking written comments through Sept. 25 and will hold a public hearing Oct. 15, so the details could still change.3

This Could Change the Calculus For Some Who Have Resisted Trump Accounts

Employer contributions could make Trump accounts more valuable for some who may have been hesitant about the new accounts.

Some financial experts argue that most parents would be better off investing the money in a 529 savings plan or even a custodial brokerage account. However, if your employer offers a contribution, it may be worth signing up to utilize that part of your benefits package.

How Do I Start a Trump Account?

You can open a Trump Account for your child by filling out tax form 4547 online through your IRS account or by mail.4

To be eligible, the child must be under 18 and have a valid Social Security number. U.S. citizens born between 2025 and 2028 also qualify for a one-time $1,000 government contribution, but it isn’t automatic. You have to request it on Form 4547 when you open the account. The $1,000 government contribution doesn’t count against the annual $5,000 cap.

Contributions must go into low-cost mutual funds or exchange-traded funds tracking a broad U.S. stock index, with annual fees capped at 0.10%. On Jan. 1 of the year the child turns 18, the account converts to a traditional Individual Retirement Account. After that, withdrawals will be taxed as ordinary income. Money withdrawn before 59½ generally carries a 10% penalty.

Article Sources

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1. Department of the Treasury. “Treasury Announces Employer Contributions to Trump Accounts, Drawing Corporate Support.”
2. Library of Congress. “Trump Accounts: Overview and Policy Considerations.”
3. Federal Register. “Employer Contributions to Trump Accounts and Nondiscrimination Rules for Dependent Care Assistance Programs.”
4. Department of the Treasury. “Treasury Announces the Launch of the Trump Accounts App and Next Steps for Trump Accounts.”