Trump Accounts

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Seyfarth Synopsis: On August 11, 2026, the Internal Revenue Service issued proposed regulations addressing nondiscrimination rules for dependent care assistance programs (“DCAPs”) under Section 129 of the Internal Revenue Code (the “IRC”). More than 45 years after DCAPs were enacted under IRC § 129, these proposed regulations provide long-awaited guidance on DCAP nondiscrimination testing and also address employer contributions and nondiscrimination rules for Trump Accounts. For additional information on Trump Accounts, see our blogs here and here.

Background:

A DCAP allows employees to pay eligible dependent-care expenses with pre-tax dollars. Employers may also contribute to an employee’s DCAP. For 2026, the maximum amount that may be excluded from an employee’s gross income is $7,500, or $3,750 for a married individual filing separately.

Eligible expenses generally include care for:

  • A child under age 13; or
  • A spouse or dependent who lives with the employee and is physically or mentally incapable of self-care

The proposed regulations confirm and elaborate on the four statutory nondiscrimination tests applicable to DCAPs:

  • Contributions and benefits test
  • Eligibility test
  • Owner concentration test
  • Average benefits test

For the first time, each test receives detailed regulatory guidance.

Continue Reading Worth the Wait: After 45 Years, Dependent Care Assistance Programs Finally Get Regulations
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Seyfarth Synopsis: The IRS has issued further guidance on Trump Accounts addressing employer contributions and eligible investments in which Trump Account funds may be invested.

We discuss the new guidance in our Legal Update here. As discussed in our prior blog posts, including “Trump Accounts: The New Kid on the IRA Block” and “No ERISA…

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Seyfarth Synopsis: The Department of Labor (DOL) recently issued Technical Release 2026-02, which clarifies that neither Trump Accounts nor employer contributions to Trump Accounts are considered “employee pension benefit plans” under Section 3(2) of ERISA. For additional information about Trump Accounts, please see our prior to blog posts here and here.

What We Already Knew about Employer and Employee Contributions to Trump Accounts

The One, Big, Beautiful Bill Act and related Treasury guidance previously provided the following parameters for employer and employee contributions to Trump Accounts:

  • Employers may contribute up to $2,500 to Trump Accounts of young employees or children of employees under an Internal Revenue Code Section 128 program (“Section 128 Program”). These contributions are not considered taxable income to the employees or the Trump Account beneficiaries.
  • The $2,500 limit applies on a per employee basis, meaning that if an employee has multiple children with Trump Accounts, the employer’s aggregate contributions to those children’s Trump Accounts may not exceed $2,500.
  • Employers can facilitate pre-tax employee contributions to Trump Accounts for the employee’s dependents (but not the employee) through a Section 125 cafeteria plan.  However, these employee contributions are technically still considered “employer” contributions under a Section 128 Program and would therefore be subject to the same $2,500 limit described above.
  • All Section 128 Program contributions must be made pursuant to a written plan document and the contributions must comply with applicable nondiscrimination testing rules (which are expected to look similar to the nondiscrimination testing rules applicable to Dependent Care Spending Accounts).
Continue Reading No ERISA Strings Attached: The DOL Weighs in on Employer and Employee Contributions to Trump Accounts
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Seyfarth Synopsis: Since Trump Accounts made their debut as the “New Kid on the IRA Block” in December 2025, Treasury and the IRS have released proposed regulations that add important—but not always simplifying—details to the program. 

The proposed regulations, released on March 9, focus heavily on pilot contribution eligibility and enrollment, adding new…

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Seyfarth Synopsis: The IRS recently issued Notice 2025-68, providing initial guidance on a new savings vehicle: Trump Accounts, created under Section 530A of the Internal Revenue Code by the One, Big, Beautiful Bill Act (OBBBA). While proposed regulations are still forthcoming, the recent IRS guidance provides a high-level overview of various Trump Account features, including…