Internal Revenue Code §530A, enacted as part of the One Big Beautiful Bill Act signed into law on July 4, 2025, created a new type of tax-advantaged savings vehicle known as a Trump Account. A Trump Account is a special form of traditional IRA established for the benefit of a child under age 18, allowing parents to invest and grow wealth for their child’s future. To be eligible, the child must have a Social Security number, and an election must be made to open the account before the end of the calendar year in which the child turns 18. The child is considered the owner and beneficiary of the account.

Trump Accounts are subject to unique rules during the period before the beneficiary reaches age 18, referred to as the growth period. During this time, withdrawals are generally prohibited, with limited exceptions such as certain rollover contributions, correction of excess contributions, or distributions following the beneficiary’s death. As a result, account assets are generally intended to remain invested and grow until adulthood.

Contributions may be made by parents and other individuals, employers, nonprofit organizations, and certain governmental entities. During the growth period, most contributions are subject to an annual limit of $5,000, which will be adjusted for inflation beginning after 2027. However, certain contributions, including the federal government’s $1,000 pilot program contribution, qualifying nonprofit or governmental contributions, and eligible rollover contributions, do not count toward this annual limit.

However, because the rules restrict a child’s access to the funds until they turn 18, contributions to a Trump Account raised a technical gift tax concern. Under IRC § 2503(b), gifts of a future interest generally do not qualify for the annual gift tax exclusion ($19,000 for individuals, $38,000 per married couple in 2026). Because Trump Account contributions could be characterized as future-interest gifts, even relatively small contributions potentially could have required the donor to file a federal gift tax return (Form 709), regardless of the contribution amount.

The Treasury Department and IRS have recently addressed concerns that contributions to Trump Accounts could trigger federal gift tax reporting requirements. Although most contributors are unlikely to incur federal gift, estate, or generation-skipping transfer (GST) taxes because of the current $15 million lifetime exemption amounts, requiring gift tax returns for routine Trump Account contributions could create significant compliance burdens. The IRS also noted that millions of additional gift tax returns could result from the program’s widespread adoption.

To reduce administrative burdens on both taxpayers and the IRS and encourage participation, the IRS issued Revenue Procedure 2026-25 on June 29, 2026, which provides a safe harbor for certain contributions to Trump Accounts. Under this safe harbor, a donor generally will not be required to file a federal gift tax return solely because of a contribution to a Trump Account if the following conditions are met:

• The donor is an individual.
• Contributions are made in cash, including by check or electronic transfer, to one or more Trump Accounts before the beneficiary reaches age 18.
• The donor’s total gifts to any one beneficiary during the year, including Trump Account contributions and any other direct gifts to that beneficiary, do not exceed the annual gift tax exclusion amount.
• The contributions do not create any gift tax or generation-skipping transfer (GST) tax liability.
• The donor does not otherwise have a requirement to file a federal gift tax return for the year.

If these requirements are satisfied, the donor may rely on the safe harbor and avoid filing Form 709 solely as a result of making contributions to a Trump Account.

Rev. Proc. 2026-25 provides the following example: In calendar year 2026, a donor contributes $5,000 to the Trump Account of each of three children and gives one of those children an additional $13,000 cash gift during the year. Because the donor’s total gifts to each child do not exceed the annual gift tax exclusion amount ($19,000 in 2026) and no other gift tax filing requirements apply, the IRS safe harbor is available and no gift tax return is required. However, if an additional cash gift (for instance a contribution to a 529 account) increases the donor’s total gifts to a child above $19,000 for the year, the safe harbor is unavailable, and the donor generally must file a gift tax return reporting all of the year’s gifts.

If you have any questions on gifting to a Trump Account, gift tax reporting obligations, or estate planning strategies involving these accounts, please reach out to attorney Jonah Markle or any member of Barley Snyder’s Trusts & Estates Practice Group.