The IRS has issued guidance addressing whether contributions to a Trump account constitute completed gifts. (Rev. Proc. 2026-25)
Although contributions to a Trump account made by a person who is not the account beneficiary is a gift of a future interest, the IRS is providing gift tax filing relief for qualified taxpayers. If a taxpayer meets all of the following safe harbor requirements, the IRS will not require the donor to file a gift tax return:
- The taxpayer making the contribution is an individual;
- The only taxable gifts made by the taxpayer during the calendar year are cash contributions to one or more Trump accounts, each made before the calendar year in which the account beneficiary turns age 18;
- The taxpayer’s total gifts during the calendar year to each individual who is an account beneficiary, including contributions to that account beneficiary’s Trump account, do not exceed the annual exclusion ($19,000 for 2026);
- Such contributions to Trump accounts made during the calendar year do not generate for that calendar year either a gift or GST tax liability, after application of the taxpayer’s remaining applicable credit amount against the gift tax, or remaining GST exemption; and
- Disregarding the Trump account contributions made during the year, no gift tax return is filed or is required to be filed for that calendar year by or on behalf of the taxpayer.
The reason this safe harbor is so important is that gifts of future interests ordinarily trigger a gift tax filing requirement, even if the only gifts made by the taxpayer during the year are below the annual gift tax reporting threshold. (IRC §2503(b)(1); Treas. Regs. §25.2503-2(a))
Currently, the IRS processes about 300,000 gift tax return annually and as of June 4, 2026, nearly 6 million elections to open Trump accounts have already been received. The purpose of the safe harbor is to ease the IRS’s administrative burden by preventing the filing of millions more gift tax returns from taxpayers who are, according to the IRS, unlikely to have estates large enough to ever trigger an estate tax liability.
California Trump account tax conformity bill introduced
As part of the latest California budget deal negotiations, AB/SB 180 has been introduced which, if enacted, would include conformity to most aspects of the federal tax treatment of Trump accounts, including the exclusion of employer contributions to employee Trump accounts set up for their qualifying children. It is anticipated that the bill will be passed and signed by the Governor.
Sign up for Spidell’s 2026/27 Federal and California Tax Update Webinar to master the lessons learned with the new OBBBA deductions for tips, overtime, car loan interest, and the senior exclusion; evaluate when Trump accounts are a good option for your clients, and more. Click here and register today.
