The Department of the Treasury and the Internal Revenue Service (IRS) have introduced a new safe harbor for gift tax reporting on contributions to Trump accounts, established under the Working Families Tax Cuts. This measure, outlined in Revenue Procedure 2026-25, aims to simplify the process for individual donors.
Under the new safe harbor, certain contributions made by individuals to Trump accounts will be exempt from gift tax reporting requirements for that year, provided specific conditions are met. This relief addresses concerns from taxpayers regarding potential gift tax implications.
IRS Chief Executive Officer Frank J. Bisignano said, "By granting this relief, the IRS has responded to concerns raised by taxpayers who planned to make contributions to a Trump account but worried such donations would trigger the gift tax reporting rules." He added that "The relief granted will reduce the potential burden placed on friends and family who want to put money into a Trump account."
To open an initial Trump account for a child with a Social Security number, parents, guardians, or other authorized individuals can use the IRS Individual Online Account to complete Form 4547, Trump Account Election(s), before the child turns 18. Additionally, a $1,000 pilot program contribution can be elected for U.S. citizens born between 2025 and 2028 by checking a box on Form 4547.