The U.S. Department of the Treasury and the IRS have issued guidance stating that contributions to Trump Accounts, which are designed for children under 18, will not trigger gift tax reporting requirements. This means that parents, guardians, and others can contribute up to $5,000 per year in after-tax dollars without needing to file a gift tax return.
IRS CEO Frank Bisignano noted that this decision addresses taxpayer concerns about the complexities of gift tax rules. The IRS typically processes around 300,000 gift tax returns annually, but if Trump Account contributions had been subject to reporting, that number could have surged into the millions.
The accounts, also known as 530A accounts, include a one-time $1,000 contribution from the Treasury for newborns from 2025 to 2028, and over 6 million children have already been enrolled. This development simplifies the process for contributors and is expected to encourage more families to take advantage of the Trump Account program