Trump Account contributions will not trigger gift tax reporting
Contributions to Trump Accounts will not be subject to gift tax reporting under safe harbor rules, according to guidance released Monday by the Treasury Department and the U.S. Treasury Department. Internal Revenue Service.
As a result, parents, guardians, grandparents and others will be able to contribute up to $5,000 per year in after-tax dollars to a Trump Account and will not be required to file a gift tax return.
“By providing this assistance, the IRS is responding to concerns expressed by taxpayers who plan to contribute to a Trump account but are concerned that such donations would trigger gift tax reporting rules,” IRS Chief Executive Frank Bisignano said in a statement. “The assistance provided will reduce the potential burden on friends and families who want to deposit money into a Trump account.”
Experts say the requirement to file a gift tax return is a potential sticking point.
To qualify for the annual exemption, gifts must be “current interestCash contributions to the Trump Account will now be “treated as completed gifts of future benefits to the estate that are not gifts and for which the annual gift tax exclusion applies per person donated,” according to the IRS.
These contributions will also count towards the annual exclusion of gifts of $19,000 per recipient for 2026.
“This will take the paperwork burden off taxpayers,” said Lawrence Pon, a certified financial planner and certified public accountant based in Redwood City, Calif., “so I think this is a very positive thing that the IRS is doing for us.”
This also eliminates a significant burden on the IRS, he added. “The IRS normally receives about 300,000 gift tax returns a year, and if Trump Account contributions were subject to this requirement, the returns would number in the millions,” Pon said.
