What Is a Trump Account?
Trump Accounts are savings accounts designed for children (U.S. citizens born between 2025–2028), allowing certain authorized individuals like parents or guardians to open an account using IRS form 4547. These accounts are tied to new benefits under the Working Families Tax Cuts legislation. (irs.gov)
Safe Harbor Under Revenue Procedure 2026-25
Issued June 29, 2026, the IRS’s Revenue Procedure 2026-25 establishes safe harbor rules so that contributions to Trump Accounts won’t trigger gift tax reporting, provided specific requirements are met. (irs.gov)
Key criteria include:
- The Trump Account must be properly elected via Form 4547 before the calendar year in which the child turns 18.
- Contributors must follow the program rules set forth under Working Families Tax Cuts.
- For children born in 2025–2028, there’s a pilot $1,000 contribution election available at account setup.
If these requirements are satisfied, donors avoid needing to file gift tax returns for those contributions in that year.
Practical Guidance & Steps
- Complete Form 4547 timely: Election must be made before the child’s 18th birth-year calendar begins. Missing deadlines disqualifies safe harbor.
- Confirm child’s citizenship and birth year: Only U.S. citizens born in 2025–2028 qualify.
- Check the pilot contribution: If eligible, elect the $1,000 contribution option during setup.
- Record keep every contribution: Even under safe harbor, well-documented sources will help in case of any IRS inquiry.
Example
Parent A opens a Trump Account for their child, born in 2026, and completes Form 4547 in 2026. They elect the $1,000 pilot contribution. Over the year, they contribute additional funds. Under Revenue Procedure 2026-25, the $1,000 pilot and contributions that follow rules won't require gift tax reporting if the safe harbor conditions are met.
Compliance Pitfalls to Avoid
- Electing after the required deadline. The election MUST be before the calendar year the child turns 18.
- Using funds outside the permitted contribution schedule. Non-qualified contributions may break safe harbor.
- Failing to use Form 4547 properly or misreporting child’s birth year.
Why This Matters
Without safe harbor, contributions to third-party accounts for minors can count as gifts, possibly exceeding the annual exclusion amount and triggering Form 709 gift tax filing. Safe harbor simplifies this for families meeting the criteria.
Takeaway: If you plan to contribute to a Trump Account for an eligible child, ensure you satisfy all conditions under Revenue Procedure 2026-25 — timely election, documentation, and eligible status — to avoid unnecessary gift tax obligations.