A New Safe Harbor for Trump Account Contributions: What Rev. Proc. 2026-25 Means for Gift Tax Reporting
Background
Trump accounts were created by the One, Big, Beautiful Bill Act on July 4, 2025. A Trump account is a type of traditional IRA established for the exclusive benefit of an eligible individual who has not yet turned 18. As of June 4, 2026, nearly six million elections to open a Trump account had been received. During the account's “growth period”—the years before the beneficiary turns 18—distributions from the account are generally restricted, a feature that raised a technical concern under the transfer tax rules.
Gifts of a “future interest” in property do not qualify for the annual per-donee gift tax exclusion, which is $19,000 per recipient for 2026. Because a Trump account restricts the beneficiary's access to funds during the growth period, contributions arguably could be characterized as gifts of a “future interest.” If so, every contributing donor would be required to file a gift tax return (Form 709) reporting the gift, regardless of the amount of the gift.
The Safe Harbor
Rev. Proc. 2026-25 resolves the issue for most donors. Under Section 5, a Trump account contribution will be treated as a “completed gift,” not a “future interest,” which will make it eligible for the annual exclusion, provided the taxpayer meets all five requirements set out in Section 4.02:
- The taxpayer is an individual.
- The taxpayer's only taxable gifts for the year are cash contributions to one or more Trump accounts, each made before the beneficiary turns 18.
- The taxpayer's total gifts to any one beneficiary for the year, including the Trump account contribution, do not exceed $19,000.
- The contributions do not generate gift or GST tax liability after applying the taxpayer's remaining lifetime exclusion or GST exemption.
- Apart from the Trump account contributions, no gift tax return is required—or actually filed—for that year, for any purpose.
A Cliff, Not a Cushion
However, the safe harbor is an all-or-nothing test, not a partial exclusion. Section 6 of the revenue procedure illustrates this with an example. A donor who contributes to three Trump accounts and stays under $19,000 per beneficiary qualifies for the safe harbor in full. But if that same donor gives an additional $14,500 in cash to one of those beneficiaries—pushing that beneficiary's total gifts above $19,000—the safe harbor is lost entirely for that beneficiary's contribution, and the donor must then file a gift tax return reporting all gifts made that year, treating the Trump account contributions to that beneficiary as gifts of a “future interest.”
What This Means For You
If you are considering contributions to a Trump account for a child or grandchild, our firm can help you evaluate whether the safe harbor applies to your situation and how it interacts with your broader estate and gift tax planning. Please contact us to discuss your circumstances.
