Employer matching on Trump Accounts may sound like a natural extension of the family-first benefits trend that has reshaped recruiting over the past five years. Childcare subsidies, fertility treatments, adoption assistance—each arrived with enthusiasm and, eventually, compliance fine print. Now plan sponsors face a new question: can they offer contributions to employees’ children’s Trump Accounts without stepping into an ERISA quagmire?
A recent Fiduciary News article by Christopher Carosa explores the tension between the recruiting appeal of Trump Account Contribution Programs (TACPs) and the regulatory uncertainty that still surrounds them. With contributions not beginning until July 4, 2026, sponsors who want to move quickly have a compressed window to design, test, and communicate the benefit—and plenty of open questions to navigate.
Trump Accounts, introduced by the One Big Beautiful Bill Act of 2025, are custodial-style traditional IRAs for minors. The federal government will contribute a $1,000 seed to accounts for eligible newborns, but the real action for plan sponsors is in the employer contribution rules. Employers can establish TACPs that permit both employer contributions and pre-tax employee salary deferrals through an amended Section 125 cafeteria plan. The combined annual limit per child is $5,000, but the employer contribution exclusion is capped at $2,500 per employee, regardless of how many children that employee has.
That per-employee (not per-child) ceiling is the kind of structural detail that can get lost in the excitement of a new benefit launch. The nondiscrimination requirements add another layer: the statute imports testing rules comparable to those governing dependent care FSAs, and the 55% benefit test is a genuine obstacle. Jack Towarnicky, Of Counsel at Koehler Fitzgerald, says sponsors should expect to limit highly compensated employee deferrals or exclude them entirely. Still, he anticipates aggressive employers may adopt automatic features with a 50% or 100% match for 2026.
The procedural requirements are substantial. Employees must first establish Trump Accounts for eligible dependents through IRS Form 4547 or an online portal expected at TrumpAccounts.gov by July 4. Employers must adopt a separate written plan satisfying requirements parallel to dependent care FSA rules. When making contributions, employers must notify the Trump Account trustee that the payment qualifies as an employer contribution under Section 128 of the tax code—the provision that makes it excludable from gross income—and report contributions on W-2s in Box 12 using Code TA. Michelle Capezza, Of Counsel at Mintz Levin, describes these steps as “just highlights” of the compliance considerations.
Perhaps the biggest open question is whether TACPs create ERISA-covered plans. The HSA analogy is instructive but imperfect: HSA salary deferrals through a cafeteria plan are generally not subject to ERISA because the account is owned by the individual. If Trump Accounts follow the same logic, the ERISA exemption argument is plausible—but as Towarnicky notes, any employer matching or discretionary contribution “might be determined to be part of an ERISA plan.” The DOL has not issued definitive guidance.
The counsel from both experts is clear: take appropriate time. Sponsors who rush a TACP to market may find themselves retrofitting compliance after the fact—precisely the kind of process failure that generates litigation risk.
