Trump Account contributions have a Dec. 31 deadline — and employers can complicate the math

As year-end approaches, millions of families have a new deadline: Dec. 31 is the last chance to make Trump Account contributions for 2026.

The due date also applies to employers offering Trump Account employee benefits — via direct contributions or paycheck deferrals.

Workers should check their benefits before maxing out Trump Accounts for the year, since company deposits and employee deferrals count toward the annual limit, said Tom O’Saben, director of tax content and government relations for the National Association of Tax Professionals.

“You want to make sure you don’t overfund it,” O’Saben said. Otherwise, you could face a hefty penalty — 6% yearly on excess contributions until the money is removed, plus 100% of earnings from those funds when withdrawn.

Launched on July 4, Trump Accounts, also known as 530A accounts, are a new tax-deferred investing option for children, designed to help the next generation build wealth.

For 2026, the Trump Account contribution limit is $5,000, which includes deposits from family, companies and others. This limit doesn’t include the $1,000 seed money from the Treasury Department for kids born between 2025 and 2028 or philanthropic gifts such as the Dell Foundation’s $250 grants.

The Treasury and IRS in August released proposed regulations, with early guidance for companies offering Trump Account benefits to employees. Public comment is open, and the agencies will host an October hearing before finalizing the rules.

The proposed regulations “clarified some things,” but other questions remain, said April Walker, senior manager for tax practice and ethics with the American Institute of CPAs.

In the meantime, here’s what small businesses and employees need to know about Trump Account benefits for 2026.

For 2026, employers can contribute up to $2,500 per employee, which doesn’t count as income for the worker, but is still subject to payroll taxes. Alternatively, the company can set up a program for pre-tax employee deferrals to fund accounts from their paycheck.

The Trump Account employer contribution limits, and other guidelines, apply to both large companies and small businesses.

“Trump Accounts give small businesses a new, low-cost, tax-preferred benefit they can use to attract and keep workers, invest in their employees’ families, help workers share in America’s growth, and strengthen Main Street over the long term,” a Treasury spokeswoman told CNBC in an email.

However, company participation could be limited for the first couple of years, according to a Mercer poll of roughly 350 U.S. employers from April. The poll found only 4% of those surveyed planned to implement a Trump Account contribution program in 2026 or 2027.

Trump Account contributions won’t be excluded from income for an “owner-employee” if the owner is a sole proprietor, partner or more than 2% shareholder of an S corporation, according to the proposed regulations released by the Treasury in August.

“If they have employees, they are able to establish a Trump Account contribution program and give to their employees or their employees’ children, but they can’t then also give to their own children from that,” Henry-Moreland said. “It has to follow some pretty strict rules.”

There are several steps for employers to establish a Trump Account contribution program, including a written plan document, certification procedures, notices to employees and reporting, among others, according to the Treasury.

“It’s very similar to any other type of employer plan,” said Walker with AICPA.

Plus, there are the so-called “non-discrimination rules” employers must follow, she said. Generally, these guidelines don’t allow a company tax break if benefits favor top executives and the highest earners.

“It essentially says that contributions to these Trump Accounts cannot overly favor the owners, the highly compensated employees of the company, over everyone else in the company,” said Henry-Moreland.