10/10/2026
Business owners: before you multiply $2,500 by every kid on your team… slow down.
Part 3 of 3: Trump Accounts + employer contributions.
Here’s what matters:
• In 2026 and 2027, a qualifying employer program can let an employee exclude up to $2,500 a year from federal gross income. That’s PER EMPLOYEE, not per child. It can be split between eligible children’s accounts.
• Employer money counts toward each account’s $5,000 annual counted contribution limit during the growth period. Put in $2,500, with no other counted deposits, and $2,500 of room remains.
• The federal $1,000 pilot deposit, qualified general contributions and qualified rollovers are outside that limit. Both annual limits are indexed after 2027.
You don’t have to offer the maximum.
$1,000 Ă— 10 eligible participating employees = $10,000 a year, plus setup and administration. This is a budget example.
Can the business deduct it? Generally, qualifying employer contributions are deductible.
But deductible doesn’t mean free. A deduction reduces taxable income; it doesn’t reimburse every dollar spent. Your tax savings depend on your business’s situation.
You need a separate written contribution plan. Before offering it, review owner eligibility, plan requirements, payroll taxes and reporting with your tax and payroll team. Detailed employer regulations reviewed are proposed, not final.
And ask your employees whether they value it. Money for their child’s future could matter a lot, but it won’t pay this month’s rent.
Can you afford it consistently? Would your employees use it? Can you administer it correctly?
Save this before you offer it to your team.
IRS sources:
IRS.gov/newsroom/working-families-tax-cuts
IRS.gov/irb/2025-52_IRB
IRS.gov/publications/p15a
IRS.gov/irb/2026-37_irb
