What Are Trump Accounts and the Safe Harbor
Under the Working Families Tax Cuts, Trump Accounts allow parents, guardians, or other authorized individuals to establish special accounts for eligible children. These accounts feature government contributions, authorized deposits, and specific tax treatment. (irs.gov)
On June 29, 2026, the IRS issued Revenue Procedure 2026-25, providing safe harbor from gift tax reporting for certain contributions to Trump Accounts, provided specific conditions are met. (irs.gov)
Key Details of the Safe Harbor
- If you make contributions to a Trump Account as an individual donor, those contributions may not be required to be reported as gifts if they satisfy the safe harbor requirements in Rev. Proc. 2026-25.
- Signing up must be done via IRS Individual Online Account using Form 4547, making the required election before fund establishment. Children must be U.S. citizens and born between 2025-2028 for certain pilot benefits. (irs.gov)
How to Take Advantage
- Ensure you complete the election properly with Form 4547.
- Confirm your child is eligible (born after 2024 and before 2029, U.S. citizen).
- Make sure your contribution is within allowed limits and properly designated.
- Keep records of your contribution and the election paperwork in case of IRS requests.
Implications & Buzz
- Reduced tax reporting burden on family donors.
- Clarity around contributions helps avoid accidental overreporting or tax penalties.
- Encourages more family-level participation in Trump Account funding.
Example
Sarah wants to contribute $1,000 to her two-year-old son’s newly established Trump Account in 2026. Using Form 4547 in her IRS online account, she makes the proper election. Under Revenue Procedure 2026-25’s safe harbor, that $1,000 contribution won’t be treated as a gift for gift tax reporting.
Families should consult with tax advisors to ensure every element—election, limits, eligibility—is correctly handled to qualify for safe harbor protection.