What are Trump Accounts?
Under the Working Families Tax Cuts (WFTC) passed July 4, 2025 (Pub. L. 119-21), Trump Accounts are new savings accounts you can open for children under 18 with valid SSNs. They grow tax-benefited, similar in spirit to education or retirement accounts, though the specific rules differ.(irs.gov)
Key features include:
- Accounts established before the calendar year the child turns 18
- A pilot program where children born between 2025 and 2028 and meeting citizenship requirements may receive a $1,000 contribution as seed money(irs.gov)
Safe Harbor for Gift Tax Reporting (Rev. Proc. 2026-25)
Concerns arose about whether contributions to Trump Accounts would trigger gift tax reporting (Form 709), especially for generous donors. To address this, the IRS issued Revenue Procedure 2026-25, which lays out a safe harbor under which certain contributions do not require filing a gift tax return.(irs.gov)
To qualify for the safe harbor in 2026, all these must apply:
- Donor is an individual
- Only gifts are cash contributions to Trump Accounts, before the account beneficiary turns 18
- Total gifts to each beneficiary (including Trump Account) in the calendar year do not exceed the annual exclusion amount ($19,000 in 2026)(irs.gov)
- Contributions must not generate gift or GST tax liability after using applicable credits or exemptions
- The donor must otherwise have no requirement to file a gift tax return for other gifts in that year.(irs.gov)
Examples
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Grandparent, three grandchildren A, B, and C. Gives $5,000 each into their Trump Accounts during 2026. No other gifts. Safe harbor applies—no Form 709 filing required.
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If same grandparent gives $13,000 extra to grandchild C (so total to C = $18,000 including Trump account money) while also making separate non-Trump gifts elsewhere, and those combined exceed $19,000, then the safe harbor fails—Form 709 must be filed.(irs.gov)
Why this matters
Without safe harbor:
- Millions more gift tax returns (Form 709) could have been required.
- Administrative burden on donors and on the IRS would rise sharply.(irs.gov)
With this safe harbor:
- Many donors avoid filing Form 709 if they stay under the rules above.
- Easier planning for families contributing to Trump Accounts.
Planning tips
- Monitor gifts to each child closely; exceeding $19,000 can trigger reporting obligations.
- Keep excellent documentation: amounts, dates, that contributions are to Trump Accounts.
- Be aware of citizenship and age rules for pilot program incentives.
- Use gift tax exclusions and lifetime exclusion thoughtfully when combining Trump Account contributions with other gifts.
Pro tip: If you're making gifts for multiple kids, divide contributions so none individually breach the annual exclusion. Use multiple small contributions rather than one large one to stay within safe harbor limits.