Can Your Business Offer Trump Account Contributions? Here's What's Involved
If you're a business owner who's heard other employers are contributing to their employees' kids' Trump Accounts, you've probably got a practical question: is this something we could offer, and what would it actually take?
The short answer is yes, and recent guidance from the Department of Labor has made it considerably less complicated than it looked a few months ago. Here's what a compliant program involves, in plain terms.
The Basic Benefit: What Employers Can Contribute
Under new tax code Section 128, employers can contribute up to $2,500 per employee per year toward a Trump Account, either for the employee's dependent child or, in some cases, for a 16- or 17-year-old employee's own account. That contribution is excluded from the employee's taxable income, and it counts toward (not on top of) the overall $5,000 annual contribution cap on the account.
The benefit is available for children as long as the account is opened before the year in which the child turns 18, and contributions can also flow through a cafeteria plan via salary reduction if the employer sets it up that way.
A handful of large national employers, including several major banks and tech companies, have already announced matching programs for employees' newborns. For a small or midsize business, the same basic structure can work at a much smaller scale.
The Question That Was Holding Employers Back: Is This an ERISA Plan?
Before mid-June, this was the sticking point. If an employer contribution program for a Trump Account counted as an "employee pension benefit plan" under ERISA, it would trigger fiduciary duties, reporting requirements, and plan administration obligations that make a lot of small businesses understandably nervous.
On June 17, 2026, the Department of Labor issued Technical Release 2026-02, taking the position that Trump Accounts and TACPs will generally not constitute "employee pension benefit plans" under Section 3(2) of ERISA. That's good news for employers who want to offer this without taking on a full benefit-plan compliance burden.
There's a nuance worth understanding, though. Because ERISA's definitions require that a pension plan provide retirement income to employees, the DOL explains that Trump Accounts and TACPs providing benefits for the dependents of employees fall outside ERISA, even if funded by employer contributions. That covers the most common scenario: contributing to your employees' kids' accounts.
For Trump Accounts that directly benefit employees themselves, such as a 16- or 17-year-old employee, the DOL says ERISA still won't apply, but only if the employer satisfies certain conditions around how the program is structured and communicated.
What a Compliant Program (a "TACP") Actually Requires
A Trump Account Contribution Program, or TACP, isn't something you can run informally through a verbal agreement or a line in an offer letter. Based on current guidance, a properly built program needs:
A Written Plan Document
The program has to be documented in writing, spelling out who's eligible, how much the company will contribute, and how the program operates.
Voluntary Participation
Employees have to be able to opt in or out. It can't be structured as a mandatory or automatic deduction employees have no say over.
The Employer Staying Out of Investment Decisions
To preserve the non-ERISA treatment, the employer shouldn't be directing or influencing how the money in the account gets invested. That's the account owner's (or the parent's) call.
No Representation as an Employee Benefit Plan
This is a subtle but important one: the DOL's guidance specifically limits an employer's ability to hold the TACP out as a formal employee benefit plan, even though in practice it functions like one. How this gets worded in your employee communications matters.
An Employee Notice and Annual Statement
Employees need to be notified about the program, and a January 31 statement is part of what keeps the program compliant. Skipping the notice or the annual statement is one of the more common mistakes flagged by benefits attorneys reviewing early adopters of this benefit.
Timing
Contributions couldn't be made before July 4, 2026. If your program has been in the works, make sure nothing was funded ahead of that date.
Why This Might Be Worth Doing for a Southeast Small Business
For a service-based business competing for talent in a tight labor market, a benefit like this has a few things going for it:
It's a genuinely differentiated benefit. Very few small and midsize employers in the Southeast are offering this yet, which means it stands out on a benefits list in a way another 1% 401(k) match increase doesn't.
It's family-oriented, not just employee-oriented. For employees with young kids, a contribution toward their child's account can land differently than a comparable amount added to their own paycheck or retirement plan.
The tax treatment is favorable on both sides. The contribution is excluded from the employee's income, and it's a deductible business expense, similar in spirit to how other fringe benefits are treated.
It's not free to administer, though. Someone (whether that's your payroll provider, your HR team, or an outside administrator) needs to own the written plan document, the enrollment and opt-in tracking, and the annual notice requirements. This isn't a "set it and forget it" perk.
Where Payroll and HR Fit In
Running a TACP touches payroll in a few concrete ways: excluding the contribution from taxable wages correctly, tracking per-employee contribution caps so nothing accidentally exceeds the $2,500 employer limit, and coordinating the annual notice and statement requirements so nothing falls through the cracks at year-end.
For a business already handling payroll in-house or through basic software, this is exactly the kind of added complexity that tends to create errors down the road, not because the concept is hard, but because it's one more compliance thread to track alongside everything else payroll already demands.
Bottom Line
The ERISA question that made this benefit feel risky earlier this year has largely been resolved in employers' favor. What's left is a fairly standard program-design and payroll-administration task: build the written plan, keep participation voluntary, stay out of investment decisions, and make sure the notice and reporting requirements don't slip.
