Trump Accounts and Contribution Pilot Program

What the document says

“a Trump account shall be treated for purposes of this title in the same manner as an individual retirement account under section 408(a).”

The section adds a new part IX and section 530A to subchapter F of chapter 1 of the Internal Revenue Code of 1986. Except as the section or the Secretary's rules provide, a Trump account is treated for tax purposes the same way as an individual retirement account under section 408(a).

What the document says

“The term `Trump account' means an individual retirement account (as defined in section 408(a)) which is not designated as a Roth IRA and which meets the following requirements:”

The section defines a Trump account as an individual retirement account that is not a Roth IRA, either created by the Secretary for the sole benefit of an eligible individual or created in the United States for the sole benefit of an individual under 18 and funded by a qualified rollover contribution, designated as a Trump account when set up. Its governing instrument must bar any contribution before the date 12 months after enactment, bar a contribution above the yearly limit for a year before the beneficiary turns 18, bar any distribution before the first day of the year the beneficiary turns 18 except as the section allows, and bar investment in anything but an eligible investment before that day.

What the document says

“who has not attained the age of 18 before the close of the calendar year in which the election under subparagraph (C) is made,”

The section defines an eligible individual as one who has not turned 18 before the end of the calendar year in which the election is made, for whom a social security number within the meaning of section 24(h)(7) was issued before the election, and for whom an election is made either by the Secretary, on information from tax returns or otherwise, or by another person at the time and in the manner the Secretary prescribes, in each case where no prior election has been made the other way.

What the document says

“The term `eligible investment' means any mutual fund or exchange traded fund which--”

The section defines an eligible investment as a mutual fund or exchange traded fund that tracks a qualified index, does not use leverage, has annual fees and expenses of no more than 0.1 percent of the balance, and meets any other criteria the Secretary sets. A qualified index is the Standard and Poor's 500 stock market index or another index made up of equity investments in primarily United States companies for which regulated futures contracts trade on a qualified board or exchange. An industry or sector specific index does not count, but an index based on market capitalization may.

What the document says

“The aggregate amount of contributions (other than exempt contributions) for such calendar year shall not exceed $5,000.”

The section caps contributions for a calendar year before the beneficiary turns 18 at $5,000, not counting exempt contributions, which are a qualified rollover contribution, a qualified general contribution or a contribution under section 6434. No deduction is allowed under section 219 for a contribution made before that year, and section 219(f)(3) does not apply to such a contribution. From a taxable year after 2027 the $5,000 rises by a cost of living adjustment measured from calendar year 2026, rounded down to the nearest $100.

What the document says

“Except as otherwise provided in this subsection, no distribution shall be allowed before the first day of the calendar year in which the account beneficiary attains age 18.”

The section bars any distribution before the first day of the calendar year in which the beneficiary turns 18, except for a qualified rollover contribution, a qualified ABLE rollover contribution made in the year the beneficiary turns 17 that moves the whole balance to an ABLE account, and a distribution of excess contributions, which is not counted as income but on which tax is increased by 100 percent of the net income attributable to the excess. Where the beneficiary dies before that year the bar does not apply, the account stops being a Trump account on the date of death, and the fair market value less the investment in the contract is counted in the income of whoever takes the interest or of the beneficiary's last taxable year if the estate takes it. In applying section 72, the investment in the contract leaves out general contributions, pilot contributions and employer contributions excluded under section 128.

What the document says

“The term `general funding contribution' means a contribution which--”

The section defines a general funding contribution as one made by an entity described in section 170(c)(1), other than a possession of the United States or its subdivision, or an Indian tribal government, or by an organization described in section 501(c)(3) and exempt under section 501(a), that names a qualified class of account beneficiaries to receive it. A qualified general contribution is the Secretary's payment of such a contribution to a beneficiary in that class, in an amount equal to the contribution divided by the number of beneficiaries in the class. A qualified class is all beneficiaries under 18 at the end of the year, or that group narrowed to named States or qualified geographic areas, or to named birth years. A qualified geographic area is one where at least 5,000 beneficiaries live and that the Secretary designates.

What the document says

“In the case of any Trump account created or organized by the Secretary, the Secretary shall take into account the following criteria in selecting the trustee:”

The section requires the Secretary, in choosing a trustee for an account the Secretary creates, to take into account the trustee's history of reliability and regulatory compliance, its customer service experience, and the costs it imposes on the account or the beneficiary.

What the document says

“The trustee of a Trump account shall make such reports regarding such account to the Secretary and to the beneficiary of the account at such time and in such manner as may be required by the Secretary.”

The section requires the trustee to report to the Secretary and the beneficiary on contributions, including the amount and source of any contribution over $25 from someone other than the Secretary, the beneficiary or a parent or legal guardian, on distributions including rollovers, on the fair market value of the account, on the investment in the contract, and on anything else the Secretary requires. Within 30 days of a qualified rollover contribution the trustee must report the beneficiary's name, address and social security number, its own name and address, the account number, its routing number and anything else required. The duty stops after the calendar year the beneficiary turns 17. Failure to report is added to the penalty list in section 6693(a)(2).

What the document says

“Gross income of an employee does not include amounts paid by the employer as a contribution to the Trump account of such employee or of any dependent of such employee”

The section adds a new section 128 to the Internal Revenue Code of 1986 leaving out of an employee's gross income what an employer pays into the Trump account of the employee or a dependent, under a written program that meets requirements similar to paragraphs (2), (3), (6), (7) and (8) of section 129(d). No more than $2,500 may be excluded for an employee, rising from a taxable year after 2027 by a cost of living adjustment measured from calendar year 2026 and rounded down to the nearest $100.

What the document says

“Gross income of an account beneficiary shall not include any qualified general contribution to a Trump account of the account beneficiary.”

The section adds a new section 139J to the Internal Revenue Code of 1986 leaving a qualified general contribution to a beneficiary's Trump account out of that beneficiary's gross income, with terms taking the meaning they have in section 530A.

What the document says

“such eligible child shall be treated as making a payment against the tax imposed by subtitle A (for the taxable year for which the election was made) in an amount equal to $1,000.”

The section adds a new section 6434 to the Internal Revenue Code of 1986. Where an individual elects for an eligible child, the child is treated as making a $1,000 payment against tax for the year of the election, and the Secretary pays that amount to the child's Trump account. An eligible child is a qualifying child under section 152(c) born after December 31, 2024 and before January 1, 2029, for whom no prior election has been made, and who is a United States citizen. The election must include the child's social security number, the payment is not subject to reduction or offset, interest under section 6611(a) does not start before January 1, 2028, and a possession with a mirror code tax system is not covered unless it elects to be.

What the document says

“if such election was made due to negligence or disregard of the rules or regulations, there shall be imposed a penalty of $500, or”

The section adds a new section 6659 to the Internal Revenue Code of 1986 imposing a $500 penalty where an election under section 6434 is made for someone who is not an eligible child through negligence or disregard of the rules, and a $1,000 penalty where it is made through fraud, with negligence and disregard taking the meaning they have in section 6662. It also adds a new subparagraph (AA) to section 6213(g)(2) treating the omission of a correct social security number as a mathematical or clerical error.

What the document says

“$410,000,000, to remain available until September 30, 2034, to carry out the amendments made by this section.”

The section appropriates $410,000,000 to the Department of the Treasury, on top of amounts otherwise available, to remain available until September 30, 2034, to carry out the amendments made by the section, and applies those amendments to taxable years beginning after December 31, 2025.