Professional review required: this educational checklist is not a plan document or tax, payroll, benefits, or ERISA opinion. Treasury’s detailed employer regulations remain proposed.

Current statutory framework

A qualifying Section 128 program may contribute to a Trump Account for an employee or an employee’s dependent during the beneficiary’s growth period. Up to $2,500 per employee per year may be excluded from federal gross income when the requirements are satisfied, and the amount counts inside the account’s general $5,000 annual limit.

The $2,500 limit is employee-level, not per child. A single employee cannot multiply it across dependents. Amounts outside a qualifying program, or above an applicable exclusion limit, may be taxable compensation.

Account-status gate added by TD 10056

An unclaimed auto account generally cannot receive family or employer contributions. Before transmitting funds, confirm through a trustee, payroll processor, or other appropriate service that the destination is a valid, established Trump Account capable of receiving the contribution. A claim or Form 4547 submission without subsequent activation is not enough.

Payroll tax treatment

Treasury and the IRS state that qualifying Section 128 contributions are excluded from federal gross income and generally are not subject to federal income tax withholding, but there is no corresponding exclusion from FICA, FUTA, or RRTA wages unless another exclusion applies. For 2026, IRS payroll guidance calls for reporting in Form W-2 Box 12 using Code TA.

Payroll teams should verify the final Form W-2 instructions, state and local wage treatment, the employee and employer FICA calculation, FUTA treatment, and correction mechanics before the first deposit.

DOL conditions for avoiding ERISA plan status

DOL Technical Release 2026-02 concludes that employer contributions during the growth period generally do not create an ERISA-covered plan when all of these conditions are maintained:

  • Employee participation is completely voluntary.
  • The employer does not impose fund-use conditions beyond those permitted by the Internal Revenue Code.
  • The employer does not make or influence investment decisions.
  • The employer does not represent the account or contribution program as an employer pension or welfare plan.
  • The employer receives no payment or compensation in connection with the account.

Employer or trustee restrictions on permitted rollovers beyond Code or regulatory restrictions can also undermine this analysis. Benefits counsel should review communications, vendor contracts, payroll deductions, and any employer endorsement.

Proposed—not yet final—implementation rules

The August 2026 regulations propose requirements for a separate written plan, employee certifications, independent account verification, nondiscrimination testing, employee notices, annual statements, trustee communications, correction notices, and restrictions on forcing employees to use a particular trustee. Their proposed applicability date is generally for plan years beginning on or after publication of a final rule.

Salary-reduction treatment is also specialized under the proposal: a Section 125 salary-reduction contribution may be available for a dependent’s account, but not the employee’s own account. Do not implement this design from a summary alone.

Implementation checklist

  1. Engage benefits counsel and payroll tax advisers. Document which rules are statutory, currently effective, DOL guidance, or proposed.
  2. Design around the DOL conditions. Keep participation voluntary and prevent investment steering, employer-plan branding, extra withdrawal restrictions, or compensation.
  3. Draft the proposed-rule plan package. Cover eligibility, contribution formulas, plan year, certifications, notices, reporting, trustee communications, and corrections, subject to final-rule changes.
  4. Verify an activated receiving account. Do not send contributions to an unclaimed auto account or rely only on an employee certification that an account is valid.
  5. Configure payroll taxes and reporting. Address FICA, FUTA, RRTA where applicable, income-tax withholding, Code TA, and state/local treatment.
  6. Control limits and allocation. Apply the per-employee Section 128 ceiling, monitor plan-level contributions, and explain that other contributors share the account’s general annual limit.
  7. Test nondiscrimination and corrections. Treat the detailed mechanics as proposed until finalized and preserve records supporting each determination.

What not to promise employees

  • Do not describe the program as an ERISA plan or promise that every design is outside ERISA.
  • Do not imply an auto account can immediately receive employer money.
  • Do not describe proposed employer regulations as final.
  • Do not describe contributions as exempt from all payroll taxes.
  • Do not promise investment performance, government insurance, or universal $1,000 pilot eligibility.

Also review the contribution limit guide, DOL Technical Release 2026-02, and IRS payroll guidance.