Important Tax Considerations Before You Fund a Trump Account

Update: This article has been updated to reflect new IRS guidance under Revenue Procedure 2026-25. The guidance provides a gift tax reporting safe harbor for certain individual contributions to Trump Accounts, changing the reporting analysis for many donors.

Trump Accounts have attracted interest from parents, grandparents, and other family members seeking new ways to support long-term savings for their children. While these accounts may offer useful benefits, they also raise important gift tax questions.

Recent IRS guidance has eased one of the biggest concerns for many individual donors. Under Revenue Procedure 2026-25, certain Trump Account contributions may qualify for a gift tax reporting safe harbor. When the safe harbor applies, qualifying contributions are treated as completed gifts and not future-interest gifts, allowing the annual gift tax exclusion to apply and removing the need to file a gift tax return solely to report them.

However, the relief is not automatic in every situation. Families should understand the safe harbor requirements before funding a Trump Account and should consider how these contributions fit within their broader tax, estate, and savings plans.

What Is a Trump Account?

Trump Accounts are tax-deferred, IRA-style savings accounts created for eligible children. They are designed to encourage long-term savings by allowing contributions that grow over time and may later be used for specified purposes.

During the growth period, Trump Accounts are subject to special rules, including restrictions on distributions before the calendar year in which the account beneficiary turns 18. Trump Accounts may receive contributions from individuals, employers, nonprofits, and certain governmental entities, subject to applicable limits and eligibility rules.

It is important to distinguish between initial government-provided or other qualifying contributions and additional contributions made by parents, grandparents, or other individuals. The gift tax planning considerations generally arise when individuals make additional contributions to a child’s Trump Account.

New IRS Safe Harbor for Certain Trump Account Contributions

The IRS issued Revenue Procedure 2026-25 to address questions about whether individual contributions to Trump Accounts could be treated as gifts of future interests. Future-interest gifts generally do not qualify for the annual gift tax exclusion, which raises concerns that even modest contributions could require donors to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

The new guidance provides a transfer tax safe harbor for certain individual donors. If all requirements are met for a calendar year, Trump Account contributions made during that year are treated as completed gifts to the account beneficiary that are not future interests in property. As a result, the annual gift tax exclusion can apply, and the donor is not required to file a gift tax return solely to report those contributions.

For 2026, the annual gift tax exclusion is $19,000 per recipient.

When the Safe Harbor Applies

The safe harbor applies on a calendar-year basis. To qualify, all of the following requirements must be met:

• The taxpayer must be an individual.
• The taxpayer’s only taxable gifts during the calendar year must be cash contributions to one or more Trump Accounts. Cash contributions may be made by cash, check, money order, or electronic funds transfer.
• Each Trump Account contribution must be made before the calendar year in which the account beneficiary turns 18.
• The taxpayer’s total gifts during the calendar year to each account beneficiary, including contributions to that beneficiary’s Trump Account, must not exceed the annual gift tax exclusion amount.
• The contributions must not generate gift tax or generation-skipping transfer tax liability for the calendar year after applying the taxpayer’s remaining applicable credit amount or remaining GST exemption.
• Disregarding the qualifying Trump Account contributions, the taxpayer must not be required to file a gift tax return for that calendar year and must not file one for that year, whether for GST tax, portability, or another purpose.

In practical terms, this means many individual donors who make straightforward Trump Account contributions within the annual exclusion amount may avoid Form 709 reporting for those contributions.

Where the Safe Harbor Can Break Down

The new guidance is helpful, but it is not blanket relief. Donors should pay close attention to other gifts made during the same calendar year.

For example, if a parent contributes to Trump Accounts for multiple children and also makes an additional cash gift to one child, that additional gift counts toward the annual exclusion limit for that child. If total gifts to that child exceed the annual exclusion amount, the safe harbor may not apply. In that case, the donor may be required to file a gift tax return and report the Trump Account contributions as gifts of future interests.

The same concern may arise if the donor:

• Makes gifts to a beneficiary that exceed the annual exclusion amount
• Makes other taxable gifts during the year
• Contributes property other than cash
• Contributes after the applicable age window
• Needs to file Form 709 for GST tax, portability, or another reason

Because the safe harbor depends on the donor’s full gifting picture for the year, Trump Account contributions should not be reviewed in isolation.

Why Compliance Still Matters

Revenue Procedure 2026-25 significantly reduces the reporting burden for many families, but it does not eliminate the need for good records or careful planning.

Taxpayers should maintain documentation showing the amount, date, form of payment, and beneficiary for each Trump Account contribution. They should also track other gifts made to the same beneficiary during the year, including gifts outside the Trump Account.

This is especially important for families already making annual exclusion gifts, funding education savings vehicles, or using more advanced estate planning strategies. A Trump Account contribution may be small on its own, but it still counts toward the broader gifting plan.

What This Means for You

For many families, the IRS safe harbor makes Trump Accounts more practical. Qualifying contributions can generally be made without triggering a gift tax return solely because of the Trump Account contribution.

That does not necessarily mean every donor will qualify. The analysis depends on who is making the contribution, how the contribution is made, the beneficiary’s age, the donor’s total gifts to that beneficiary, and whether the donor has another reason to file a gift tax return for the year.

If the safe harbor applies, the contribution generally should not reduce the donor’s lifetime gift and estate tax exemption. If the safe harbor does not apply, reporting may still be required, and the contribution may need to be coordinated with the donor’s lifetime exemption and GST planning.

Are Trump Accounts “Worth It”?

When used thoughtfully, Trump Accounts can still play a role in a family’s financial strategy. They may offer value by:

• Allowing eligible children to receive available government-provided or qualifying contributions
• Accepting additional contributions from family members or others, subject to applicable rules
• Serving as a supplemental savings vehicle alongside other savings and estate planning tools

The IRS safe harbor removes a major administrative concern for many donors. Still, families should weigh the benefits against the account's rules, contribution limits, and broader tax-planning considerations.

Where Do You Go From Here?

Trump Accounts may be a useful addition to your tax and estate planning strategy, especially now that the IRS has provided gift tax reporting relief for many qualifying individual donors. However, the safe harbor has specific requirements, and not every contribution will qualify. Before funding a Trump Account, consider how the contribution fits with your annual gifting strategy, education savings plans, estate plan, and any gift tax filing obligations.

If you’d like help evaluating Trump Accounts, gift tax reporting, or alternative savings strategies for your children or grandchildren, reach out to a CRI advisor to discuss what works best for you. A proactive conversation today can help align your savings strategy with your long-term tax and estate planning goals.