Trump Accounts Face Dec. 31 Deadline — But Employer Contributions Could Create New Tax Planning Trap
Trump Account contributions face a Dec. 31 deadline, but employer deposits and paycheck deferrals could create a tax-planning complication for workers making 2026 contributions. Trump Accounts, also known as 530A accounts, are tax-deferred accounts for children. For 2026, the annual contribution limit is $5,000, including employer and family contributions. Employer Contributions Employers can contribute up to $2,500 per employee in 2026. Companies can also offer pre-tax paycheck deferrals. Employer contributions are excluded from an employee’s income when made through a qualifying program, but remain subject to payroll taxes. Workers should check their workplace benefits before contributing more, since employer deposits and employee deferrals count toward the $5,000 annual limit. "You want to make sure you don’t overfund it," Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, told CNBC. Excess contributions can face a 6% yearly penalty until removed, plus 100% of earnings when withdrawn. Read Also: How To Open a Trump Account? Everything Parents Need to Know About Eligibility and the $1,000 Treasury Contribution Corporate
Trump Account contributions face a Dec. 31 deadline, but employer deposits and paycheck deferrals could create a tax-planning complication for workers making 2026 contributions. Trump Accounts, also known as 530A accounts, are tax-deferred accounts for children. For 2026, the annual contribution limit is $5,000, including employer and family contributions.
Employer Contributions Employers can contribute up to $2,500 per employee in 2026. Companies can also offer pre-tax paycheck deferrals. Employer contributions are excluded from an employee’s income when made through a qualifying program, but remain subject to payroll taxes. Workers should check their workplace benefits before contributing more, since employer deposits and employee deferrals count toward the $5,000 annual limit.
"You want to make sure you don’t overfund it," Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, told CNBC. Excess contributions can face a 6% yearly penalty until removed, plus 100% of earnings when withdrawn. Read Also: How To Open a Trump Account? Everything Parents Need to Know About Eligibility and the $1,000 Treasury Contribution Corporate Support Employer participation is also expanding.
American Airlines Group Inc. (NASDAQ: AAL ) announced a one-time $1,000 contribution for eligible employees’ children and plans to let eligible workers contribute up to $2,500 of pretax earnings annually starting in 2027. More than 50 companies have committed to contributing to Trump Accounts, including Goldman Sachs (NYSE: GS ) and Morgan Stanley (NYSE: MS ) Rules And Deadline The Treasury and IRS released proposed regulations in August covering employer programs, including written plans, certification procedures, employee notices, and reporting. Public comments are open, with an October hearing scheduled before finalizing the rules.
The proposed rules "clarified some things," but other questions remain, April Walker, senior manager for tax practice and ethics at the American Institute of CPAs, told CNBC. Dec. 31 remains the deadline for 2026 contributions. The $1,000 Treasury seed contribution for eligible children born between 2025 and 2028 does not count toward the $5,000 annual limit.
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