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- Parents, guardians, grandparents and others who contribute to a Trump Account will not be required to file a gift tax return reporting those contributions, the IRS and Treasury Department said Monday.
- This guidance removes a potential burden on taxpayers, experts say.
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Contributions to Trump Accounts will not be subject to gift tax reporting under the safe harbor rules, according to guidance issued Monday by the U.S. Department of the Treasury and the Internal Revenue Service.
As a result, parents, guardians, grandparents and others can contribute up to $5,000 a year in after-tax dollars to a Trump Account and they will not be required to file a gift tax return.
“By granting this relief, the IRS has responded to concerns raised by taxpayers who planned to make contributions to a Trump account but worried such donations would trigger the gift tax reporting rules,” IRS Chief Executive Officer Frank Bisignano said in a statement. “The relief granted will reduce the potential burden placed on friends and family who want to put money into a Trump account.”
The gift tax return filing requirement had been a potential sticking point, experts say.
To qualify for the annual exclusion, gifts must be “present interest,” with immediate recipient access. Now, Trump Account cash contributions “will be treated as completed gifts that are not gifts of future interests in property and to which the annual per-donee gift tax exclusion applies,” according to the IRS.
These contributions will also count towards the annual exclusion for gifts, which is $19,000 per recipient for 2026.
“It’s going to remove paperwork burdens on taxpayers,” said Lawrence Pon, a CFP and certified public accountant based in Redwood City, California, “so I think it’s a very positive thing the IRS has done for us.”
It also removes a significant burden on the IRS, he added. “The IRS normally gets about 300,000 gift tax returns per year and if Trump Account contributions were subject to this requirement, the number of returns will be in the millions,” Pon said.
Trump Accounts, also known as 530A accounts, are open to any U.S. child under 18 with a Social Security number and include a one-time $1,000 pilot program contribution from the Treasury Department for babies born from 2025 through 2028.
So far, more than 6 million American children have been signed up, according to Treasury’s recent tally.
In the lead-up to the official launch on July 4, parents and guardians can open an account for a beneficiary by filling out IRS Form 4547 with their tax return or on TrumpAccounts.gov.
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