On August 11, 2026, the U.S. Treasury Department and the Internal Revenue Service (IRS) released proposed regulations addressing employer contributions to Trump Accounts and the nondiscrimination requirements for employers offering Trump Account contribution programs.1
For a detailed discussion of the proposed rules and KPMG's observations, see KPMG report: Proposed regulations released on employer contributions to Trump accounts, (August 19, 2026).
The proposed regulations provide guidance on employer-sponsored Trump account programs, a new tax-favored retirement savings vehicle that may become part of employers' broader compensation and benefits offerings.
As multinational employers and global mobility teams evaluate whether to offer Trump account contributions as part of their employee benefits programs, they will need to understand the related payroll reporting, withholding, and compliance requirements. The proposed regulations establish the framework for employer-sponsored contributions while introducing administrative challenges, including nondiscrimination testing and trustee administration requirements, that may increase the complexity of implementation and ongoing compliance. Employers may also need to consider the broader costs associated with establishing and administering employer contribution programs.
A Trump account is a new type of traditional individual retirement account (IRA) that may be established for eligible individuals under age 18. During the growth period, contributions are generally limited to $5,000 annually (indexed beginning in 2028), distributions are generally prohibited, investments are restricted to eligible investments, and contributions are not deductible. The growth period is the period beginning when a Trump Account is established and ending on December 31 of the year the beneficiary attains age 17. Once the growth period ends, the account generally becomes subject to the traditional IRA rules. In addition, employers may contribute up to $2,500 annually per employee (indexed beginning in 2027) to an employee's or dependent's Trump Account through a qualifying employer contribution program. The employer contributions are excluded from the employee’s gross income if applicable program requirements are satisfied.
The proposed regulations clarify that employers may contribute up to $2,500 annually to an employee's or dependent's Trump account through a written employer program that satisfies specified operational and nondiscrimination requirements. Contributions that exceed the annual employer limit are generally taxable wages and must be included in employee compensation. The regulations also provide special safe harbor rules applicable to employer contributions made in connection with the federal Trump account pilot program.
While the proposed regulations provide initial guidance on establishing a Trump account employer contribution program, employers may find some of the administrative requirements difficult or expensive to satisfy. In particular,
(1) the proposed regulations provide that an employer cannot limit the trustees an employee may use to hold the Trump account, meaning an employer program may have to make contributions through multiple trustees, and
(2) there are significant nondiscrimination testing requirements that may make it difficult to avoid having some portion of the contribution becoming taxable for highly compensated employees, although any taxable contributions could remain in the Trump account.
For a detailed discussion of the proposed rules related to employer contributions to Trump accounts and KPMG's observations, see KPMG report: Proposed regulations released on employer contributions to Trump accounts, (August 19, 2026).
While qualifying employer contributions to Trump Accounts may be excluded from employee’s federal income tax, the contributions remain subject to FICA and FUTA taxes. As global mobility programs evaluate whether to include Trump account contributions as part of their employee benefit offerings, employers would need to assess the potential U.S. social security tax implications in jurisdictions that do not have a totalization agreement with the United States before implementation.
The above information is not intended to be “written advice concerning one or more federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.
The information contained in this newsletter was submitted by the KPMG International member firm in United States.
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