The Department of the Treasury and the Internal Revenue Service have released Notice 2025-68, 2025-52 IRB ___ (12/22/2025), which describes questions about “Trump Accounts” under section 530A of the Internal Revenue Code (IRC) that the Treasury and the IRS intend to address in proposed regulations, and solicits comments on the issues addressed in the notice. The notice states that it is expected that the future proposed regulations will be consistent with the guidance set forth in the notice.
IRC section 540A was added to the Internal Revenue Code by section 70204 of Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly (and incorrectly) known as the One, Big, Beautiful Bill Act (OBBBA), and it applies to taxable years beginning after December 31, 2025. (The “OBBBA” title is incorrect because the official name of the bill that passed the house was OBBBA but that name was stripped from the bill by a Senate amendment, so the bill that was passed had no title.)
A “Trump account” is a new form of individual retirement account (IRA), and differs from other kinds of IRAs in several ways, including the following:
- A Trump account can be established only for someone who is under the age of 18.
- There is a “pilot program” under which the US Treasury will contribute $1,000 to a Trump account for an account beneficiary born after 12/31/2024 and before 1/1/2029. Contributions from parents and other sources are limited to $5,000 each year (subject to inflation adjustments after 2027). Up to $2,500 (also adjusted for inflation) of the $5,000 can come from an employer contribution to a IRC section 128 plan, which will not result in income to the employee.
- Until the account beneficiary reaches the age of 18, the account can be invested only in certain kinds of mutual funds or “exchange traded funds” that track an index of US companies (such as the Standard & Poor’s 500 stock market index).
- No distributions may be made until the account beneficiary reaches the age of 18, with exceptions for the death of the account beneficiary, rollovers, and other special circumstances. Once the beneficiary reaches the age of 18, distributions are subject to the same rules as other IRAs, including the 10% penalty imposed by IRC section 72(t) for distributions unless the IRA account owner is over the age of 59-1/2 or disabled, or the distribution is for college tuition or first home purchases.
- Trump accounts are not created by individuals, but are created by the Secretary of the Treasury (or his delegate) upon the receipt of an election for the eligible beneficiary. According to Notice 2025-68, the Treasury intends to propose that the election be made on Form 4547 by a parent, legal guardian, adult sibling, or grandparent of the eligible individual. (In addition to the draft of Form 4547, there is also a draft of instructions to Form 4547.)
Neither section 540A nor Notice 2025-68 offers any guidance on gift and estate tax consequences of Trump accounts, but Notice 2025-68 refers to the Trump account beneficiary as the “owner” of the account, so the account would presumably be considered to be part of the gross estate of a deceased account beneficiary, and contributions to an account would be presumably be considered gifts to the account beneficiary that are subject to federal gift tax.
Additional information about Trump accounts can be found in Notice 2025-68, and at the trumpaccounts.gov website.
