New Safe Harbor Allows Certain Trump Account Contributions to Qualify for the Annual Gift Tax Exclusion
With Trump Accounts becoming available on July 4, 2026, one of the unanswered questions has been how contributions to these accounts would be treated for federal gift tax purposes.
Under existing gift tax rules, a gift generally must be considered a present interest gift to qualify for the annual gift tax exclusion. Because beneficiaries cannot immediately access funds in a Trump Account, there was uncertainty about whether contributions would qualify as present interest gifts. If they did not, taxpayers could have been required to file a federal gift tax return and use a portion of their lifetime gift and estate tax exemption for contributions made to a Trump Account.
The IRS and the Treasury Department have now addressed this issue through the safe harbor provided in Revenue Procedure 2026-25.
When Trump Account Contributions Qualify
Under the revenue procedure, cash contributions to a Trump Account will qualify for the annual gift tax exclusion, and no gift tax return will be required, provided all of the following conditions are met:
- The contributor is an individual.
- The individual’s only taxable gifts are cash contributions made to one or more Trump Accounts before the beneficiary reaches age 18.
- Total gifts made to that beneficiary during the calendar year, including Trump Account contributions, do not exceed the annual exclusion amount (currently $19,000).
- The contributions do not create either a gift or generation-skipping transfer (GST) tax liability after applying the taxpayer’s remaining applicable credit amount or GST exemption.
- Aside from the qualifying Trump Account contributions, the individual is not otherwise required to file a federal gift tax return.
An Important Limitation
The final requirement is particularly important. If a taxpayer must file a gift tax return during the year because of other taxable gifts that exceed the annual exclusion amount, the Trump Account contributions may not qualify for the safe harbor under Revenue Procedure 2026-25. As a result, those contributions may not be treated as annual exclusion gifts.
Contact your Keiter Opportunity Advisor if you have questions about using Trump Accounts as part of your gifting strategy.
About the Author
Ginny Graef, CPA, Partner
Ginny enjoys working closely with her clients and their team of legal and financial advisors to provide tax planning solutions that meet her clients’ specific needs and goals. Ginny’s areas of expertise include income, gift, and trust and estate compliance and planning services. In addition, she focuses on compliance and consulting related to investment partnerships.
More Insights from Ginny GraefThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
