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On 12/02/2025 the IRS issued Notice 2025-68 which is a notice of intent to issue regulations with respect to section 530A Trump accounts that will become active no sooner than July 4, 2026, one year after the signing of the legislation commonly referred to as OBBBA. Thus the IRS is in the very early stages of the writing of the tax rules as this 44 page notice is not proposed regulations or final regulations but largely a question and answer format of IRS preliminary thinking and intent to propose regulations providing guidance. Section IV of this IRS notice contains a request for our comments regarding Trump accounts.
I expect there will be many comments. There is a lot complexity in this new law and Notice 2025-68 addresses a lot of my initial questions about how Treasury/IRS is thinking about a limited portion of this new law.
From page 22 of the notice (I have made the print bold for the part that bothers me) –
D. ELIGIBLE INVESTMENTS
Section 530A(b)(1)(C)(iii) provides that, during the growth period, no part of the
Trump account funds may be invested in any asset other than an eligible investment.
Section 530A(b)(3)(A) provides that an “eligible investment” means any mutual
fund or ETF which (i) tracks the returns of a qualified index, (ii) does not use leverage, (iii) does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund, and (iv) meets such other criteria as the Secretary determines appropriate.
Section 530A(b)(3)(B) provides that a “qualified index” means the Standard and
Poor’s 500 stock market index, or any other index which is comprised of equity
investments in primarily U.S. companies and for which regulated futures contracts (as defined in section 1256(g)(1)) are traded on a qualified board or exchange (as defined in section 1256(g)(7)). Section 530A(b)(3)(B) also provides that the term qualified index does not include any industry or sector-specific index but may include an index based on market capitalization.
Why in the world would a savings provision to give children a head start with simple investments of a low cost index funds include a provision that for an investment to be an eligible investment that a regulated futures contract for the index also has to exist?
My comment – Please amend the law and delete any regulated futures requirement to be an eligible investment for IRC Section 530A.
Treasury updates through 7/6/2026 on IRC 530A accounts –
On the IRS website the Treasury announced the official opening of the IRC 530A accounts on 7/4/2026, You can link to that press release here.
Two of the key elements recently announced IRC 530A rules were –
Initial Investment Options –
At launch, all contributions to Trump Accounts will be invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM)
Additionally Treasury has also selected the following additional low-cost index ETFs for the Trump Accounts investment lineup:
Gift Tax filing safe harbor –
Rev. Proc. – 2026-25
The IRS issued Rev. Proc. 2026-25 which provides a gift tax reporting safe harbor for individual donors who make one or more contributions to Trump accounts under Sec. 530A and satisfy certain conditions.
Key elements from the Rev. Proc. –
SECTION 4. SCOPE
.01 In general. The safe harbor described in section 5 of this revenue procedure applies for a particular calendar year only if all of the requirements of section 4.02 of this revenue procedure are met.
.02 Requirements.
(1) Taxpayer is an individual;
(2) The only taxable gifts made by the taxpayer during the calendar year are cash contributions (in the form of cash, check, money order, or electronic funds transfer) to one or more Trump accounts, each made before the calendar year in which the account beneficiary attains age 18;
(3) The taxpayer’s total gifts during the calendar year to each individual who is an account beneficiary, including contributions to that account beneficiary’s Trump account, do not exceed the annual exclusion amount under section 2503(b) ($19,000 for 2026);
(4) Such contributions to Trump accounts made during the calendar year do not generate for that calendar year either a gift or GST tax liability, after application of the taxpayer’s remaining applicable credit amount against the gift tax, or remaining GST exemption; and
(5) Disregarding the Trump account contributions described in section 4.02(2) of this revenue procedure, no gift tax return is required to be filed, and no gift tax return is otherwise filed, for that calendar year by or on behalf of the taxpayer, whether for GST tax, portability, or other purposes.
SECTION 5. SAFE HARBOR
If each of the requirements specified in section 4.02 of this revenue procedure is met for a calendar year in which a taxpayer makes contributions to one or more Trump accounts, each Trump account contribution made by the taxpayer during that calendar year will be treated as a completed gift to the account beneficiary that is not a future
interest in property and to which the annual exclusion applies for purposes of gift tax, GST tax and gift tax reporting. As a result, taxpayers within the scope of section 4 of this revenue procedure will not be required to file a gift tax return reporting such contributions.
No individual wants to take on the obligation to have to file a gift tax return every year they make any contribution to a 530A account and the IRS certainly does not want to process huge numbers of meaningless form 709 tax returns. This Rev. Proc. eliminates the need to file IRS form 709 for the vast majority of anyone who is choosing to make 530A contributions.
This is an example of a good work around in my opinion.
Great idea if used properly. Any savings from birth will come in very handy for College. The kinks will be worked out by July 2026, and I suspect any Index fund worth having will be eligible. The issue is will the parents have the strength to let the savings grow, that will be the difficult part. If they never touch the cash, it will grow handsomely.
Let’s see if VT (Vanguard Total World Stock ETF) is eligible.
My guess is that the existence of the regulated futures contract confers legitimacy upon the index fund.
Explanation=lobbyist wrote the law.
Why do we need yet another savings vehicle for retirement, why all the complexity, why don’t we simply eliminate all and have one vehicle each pre or post tax, employer based or not? In this case the answer is in the name😎
Actually I say one after-tax saving vehicle with all earnings tax-free upon withdrawal for retirement after age 50. Simple, understandable, minimal rules and regulations.
And furthermore, why does every account type have a different contribution limit? A SEP may be up to $70K, 401(k) is $23.5K and a SIMPLE is $16K. If I don’t have access to any of those through an employer or self-employment, I can make a maximum contribution of only $7K!? Creating one account type for all would be an obvious solution.
Not to mention different rules for early distributions.