American families could soon receive thousands of dollars in tax-free benefits for their children under new guidance from the Trump administration outlining how employers can contribute to the newly launched Trump Accounts.
The U.S. Treasury Department on Tuesday released new rules for employer-sponsored Trump Account programs, opening the door for companies to contribute as much as $2,500 annually to accounts belonging to employees or their dependent children without that money being counted as taxable income for the worker.
The guidance also allows employers to establish arrangements enabling workers to direct pre-tax dollars from their paychecks into Trump Accounts belonging to their dependents. The option could give parents another way to reduce their taxable income while building investments for their children.
“Trump Accounts are giving American families a new way to build wealth from day one,” Treasury Secretary Scott Bessent said Tuesday. “Today, Treasury is publishing guidance that will help families grow Trump Accounts by allowing employers to contribute up to $2,500 tax-free each year for employees’ dependents and giving employees the option to contribute pre-tax dollars directly to those accounts.”
The accounts were created under President Donald Trump’s Working Families Tax Cuts and are designed as long-term investment accounts for children. Parents, guardians and other authorized individuals can establish an account for an eligible child before the calendar year in which that child turns 18.
Under the program, individuals and employers can generally contribute a combined total of up to $5,000 annually to a child’s account. Employer contributions of up to $2,500 count toward that overall annual limit but can be excluded from the employee’s taxable income when the requirements are met. Those contribution limits are scheduled to begin adjusting for inflation after 2027.
The program also includes a separate federal benefit for younger children. Eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, can receive a one-time $1,000 contribution from the federal government after an election is made to establish their Trump Account. That government contribution does not count toward the standard $5,000 annual contribution limit.
Money deposited into Trump Accounts is invested rather than simply held as cash. Federal rules require the funds to be placed in certain mutual funds or exchange-traded funds tracking the S&P 500 or another qualifying index made up primarily of American companies.
Treasury’s latest guidance focuses heavily on bringing employers into the program.
Companies seeking to establish a Trump Account employer contribution program will be required to maintain a separate written plan, provide notices and annual statements to participating employees and report information to the trustee overseeing the Trump Account.
Employers will also be permitted to rely on employees to certify a beneficiary’s age and dependent status, though companies must verify that contributions are actually being sent to a qualifying Trump Account.
The administration says corporate interest is already substantial.
According to Treasury, more than 50 companies have committed to making Trump Account contributions for employees. That could extend the benefits of the program beyond children eligible for the government’s initial $1,000 deposit.
Several major companies voiced support for the new guidance Tuesday. Chime CEO Chris Britt said the financial technology company plans to offer an employee match for Trump Accounts, while Franklin Templeton said it intends to match the government’s $1,000 contribution for eligible children of U.S. employees.
State Street has also announced plans to match the Treasury contribution for eligible children of active employees, while Vanguard said that beginning in 2027, workers will be able to direct a $1,500 employer contribution from an existing benefits program into an eligible Trump Account.
Visa similarly plans to offer eligible U.S. employees a company match of the federal government’s one-time $1,000 contribution.
