Whenever Congress creates a new tax-favored savings vehicle, our first instinct isn’t to ask, “How do we use this?”
It’s to ask:
When might this actually improve a client’s financial life?
When Roth IRAs were introduced, they were viewed as simply another retirement account. Today, they can play an important role in retirement and estate planning.
Health Savings Accounts followed a similar path. Initially promoted as a way to pay medical expenses, they have also become a tax-efficient long-term savings vehicle for many affluent families.
Will Trump Accounts, also known as 530A Accounts, follow a similar trajectory?
It’s far too early to know.
Based on the legislation, IRS Notice 2025-68, and subsequent Treasury and IRS guidance available as of August 7, 2026, Trump Accounts are an area many CPAs and other advisors may wish to monitor as additional guidance develops. They have not yet produced a “must-do” strategy. They introduce a new planning tool whose long-term applications are still taking shape.
Much of the attention surrounding Trump Accounts has centered on the federal government’s one-time $1,000 contribution for eligible children born between January 1, 2025, and December 31, 2028.
That is certainly a meaningful benefit.
But we believe the employer contribution provisions may eventually create more interesting planning conversations for business owners and their advisors.
Under Section 128 of the Internal Revenue Code, an employer may establish a Trump Account Contribution Program that provides contributions to the Trump Account of an employee or an employee’s dependent.
Under current guidance, qualifying employer contributions:
The $2,500 exclusion is an employee-level limit. An employee with more than one dependent who has a Trump Account does not receive a separate $2,500 exclusion for each dependent.
For business owners and their advisors, these rules immediately raise a host of planning questions.
One article we recently read suggested that sole proprietors could simply make deductible contributions to their children’s Trump Accounts.
Maybe.
Maybe not.
At this point, we think that is an oversimplification.
The favorable tax treatment applies to employer contributions made through a separate written Trump Account Contribution Program, not simply to any check written by a business.
That distinction may be especially important for sole proprietors. A sole proprietor is generally not treated as an employee of their own sole proprietorship for federal tax purposes. A child who performs bona fide work for the business may present a different set of facts, but the employment relationship, compensation, written program, and applicable eligibility requirements would still need to be evaluated.
The program rules also incorporate requirements similar to those applied to dependent-care assistance programs, including eligibility and nondiscrimination standards. A business generally cannot structure the benefit solely for owners or highly compensated employees.
In other words, this feels much less like, “Here’s a new tax deduction,” and much more like, “Here’s a planning opportunity that deserves careful analysis.”
A closely held business may be able to establish a Trump Account Contribution Program, but the structure of the business matters.
Questions may include:
These questions should be addressed before a business owner assumes that a contribution will receive the intended tax treatment.
Many business owners employ their children in bona fide roles.
Could a child who legitimately works in the business participate in its Trump Account Contribution Program?
Potentially.
But we would first want to understand:
Paying a child through the business does not automatically make every related contribution tax-favored. Both the employment arrangement and the employer program must withstand scrutiny.
That is exactly the type of situation in which communication among the CPA, financial planner, payroll provider, and other professionals can help prevent any decision from being made in isolation.
The law defines a Trump Account Contribution Program as a separate written plan maintained for the exclusive benefit of employees. It must provide contributions to eligible employees' Trump Accounts or their dependents' Trump Accounts and satisfy requirements similar to those governing dependent-care assistance programs.
Among other considerations, employers may need to address:
The presence of an employer-contribution provision does not mean a business can informally select a few recipients and start making payments.
The program’s design matters.
Current guidance indicates that an employer contribution must be made directly to the Trump Account through the employer’s contribution program.
The employer must also identify the payment to the account trustee as a Section 128 employer contribution.
That distinction matters. These contributions are not simply cash paid to the employee to deposit later.
Employers will need processes for:
Payroll companies, benefits professionals, account providers, and tax advisors may all play a role in determining how these programs are administered.
One of the themes we have emphasized with clients over the years is that tax efficiency is only one component of thoughtful financial planning.
The better question is:
What is the client trying to accomplish?
If the primary objective is paying qualified education expenses, a 529 plan may better align with the family’s intended use of the funds.
If the objective is building assets that can remain invested for a child’s future, a Trump Account may eventually serve as a useful complement to other accounts.
If a teenager has earned income and the family is focused on long-term retirement savings, a Roth IRA may also merit consideration.
The accounts are not interchangeable. They differ in contribution rules, investment restrictions, tax treatment, access provisions, and intended purposes.
The decision should begin with the objective, not the potential deduction.
We are not ready to declare Trump Accounts a broadly applicable planning strategy.
We are also not dismissing them as merely another government program.
The employer contribution provisions may warrant further evaluation by business owners and their advisors. They may also introduce additional complexity if the program is implemented without sufficient attention to eligibility, tax treatment, administration, and the client’s broader financial plan.
As Treasury and the IRS continue to issue guidance, we will continue to evaluate where Trump Accounts may provide a genuine planning benefit—and where another savings vehicle may be a better fit.
Yes. Section 128 permits an employer to contribute to an employee’s Trump Account or an employee’s dependent’s Trump Account when the contribution is made through a qualifying written Trump Account Contribution Program.
Up to $2,500 per employee may be excluded from the employee’s gross income in 2026 if the statutory requirements are met. The limit applies per employee, not per dependent.
Yes. Employer contributions count toward the account’s $5,000 annual contribution limit. However, the federal government’s one-time $1,000 pilot contribution does not count toward that limit.
Generally, no. Trump Account Contribution Programs are subject to eligibility and nondiscrimination requirements similar to those governing dependent-care assistance programs. These rules generally prevent a program from being designed solely for owners or highly compensated employees.
Potentially, but the answer depends on whether the child is a bona fide employee, whether the business maintains a compliant written program, and how the eligibility and nondiscrimination requirements apply. A business should not assume that employing a child or writing a business check automatically produces favorable tax treatment.
Your client may ask whether a Trump Account Contribution Program belongs in the business, family, or financial plan. Answering that question may require input from the CPA, financial planner, payroll or benefits professionals, and other advisors before anything is implemented.
Whether a Trump Account strategy is appropriate will depend on individual tax, financial, and business circumstances.
If you already work with an SDT advisor, we welcome the opportunity to discuss the planning considerations with you.
If you are new to SDT, you can schedule an introductory conversation to discuss a client situation.
Guidance and program information reviewed as of August 7, 2026. Treasury and the IRS may issue additional guidance that changes or clarifies the considerations discussed in this article.
This article is provided for educational and informational purposes only and should not be construed as investment, legal, tax, or financial planning advice. Readers should consult their own professional advisors regarding their individual circumstances. Tax laws are subject to change. The tax treatment of contributions, earnings, conversions, and withdrawals will depend on future legislation, applicable regulations, and individual circumstances.
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Shane Tenny, CFP®, is Managing Partner of Spaugh Dameron Tenny, where he helps high-net-worth individuals and families navigate complex financial decisions with clarity, structure, and confidence. Since joining the firm in 2000, Shane has worked with clients through major financial transitions, including career changes, liquidity events, retirement, and multigenerational planning. His approach combines comprehensive financial planning with a focus on behavioral finance, including advanced studies in Behavioral Economics through the University of Chicago Booth School of Business. Shane is the author of Your Next Million, former host of the Prosperous Doc® Podcast, and a nationally recognized financial advisor, speaker, and educator.
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