AICPA: Trump account regulations make 2026 rollout difficult

Employers are unlikely to be ready to implement Trump account contribution programs this year because the proposed regulations are too burdensome to administer, the AICPA said in a letter that asked Treasury and the IRS to extend the implementation timeline.

In a letter to the IRS and Treasury dated Oct. 16, the AICPA said the proposed rules would require extensive coordination among employers, employees, payroll providers, trustees, and benefits administrators for account verification, contribution processing, reporting, and nondiscrimination testing.

Regulations should allow 2026 contributions to be made through 2027, and they should consider a centralized system for account verification and contribution processing if no limit is placed on the number of trustees, the AICPA said.

“It is unlikely that the combination of sufficient guidance, vendor capabilities, and employer organization will exist in time for employers to establish Trump account programs for 2026,” the AICPA wrote. Few employers have made significant efforts to establish Trump account programs because they initially waited for regulatory guidance and continue to assess the capabilities and costs of vendors that could help administer the programs, the AICPA said.

The Sec. 530A Trump accounts are a new type of individual retirement account (IRA) for eligible children created under H.R. 1, P.L. 119-21, commonly referred to as OBBBA. They include a $1,000 contribution from the government under Sec. 6434 for children born after Dec. 31, 2024, and before Jan. 1, 2029.

H.R. 1 provides for establishing a Trump account on behalf of every eligible child for whom an election is made, generally by a parent or guardian, and who has not turned 18 before the end of the calendar year in which the election is made. The law also allows Treasury to set up accounts for individuals whom it identifies as eligible and for whom no Trump account has already been created.

New Sec. 128, enacted as part of H.R. 1, allows employers to contribute to a Trump account of the employee or the employee’s dependent up to $2,500 per year, which is not included in the employee’s taxable income. The annual contribution limits are indexed for inflation and will adjust starting after 2027.

Although Treasury and the IRS have issued Notice 2025-68 and multiple proposed regulations implementing Trump accounts, the AICPA said changes are still needed to make employer contribution programs easier to administer.

The AICPA also objected to a proposed rule that generally would prevent employers from limiting contributions to accounts held by selected trustees. Without such a limit, employers and payroll providers could face significantly greater administrative burdens, including the need for a large employer to communicate with 50 or more trustees, the letter said.

“At a minimum, if Treasury and the IRS retain the proposed prohibition on limiting trustees, the AICPA strongly recommends the creation of a centralized clearinghouse, standardized transmission platform, or similar mechanism that allows employers to submit contributions through a single interface and rely on a single uniform verification and communication process,” the AICPA said in its letter.

The AICPA also urged Treasury and the IRS to provide greater flexibility in the proposed nondiscrimination rules, saying the testing requirements could create additional compliance challenges for employers offering Trump account contribution programs.

Other recommendations included simplified compliance procedures, coordination with existing IRA correction programs, clearer reporting rules, and transition relief.

“The AICPA’s letter addresses practical compliance challenges to sections that could make Trump account programs difficult to implement. The goal of our recommendations is to reduce uncertainty and administrative burdens for employers and tax practitioners,” Michelle Zou, the AICPA’s senior manager–Tax Policy & Advocacy, said Thursday in a news release. “Clearer, standardized rules would reduce administrative complexity, make errors easier to correct, and help encourage broader employer participation.”

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.