Understanding Trump Accounts: Working Families Tax Cuts — YouTube video text script

Hello, and welcome to today's webinar, Understanding Trump Accounts: Working Families Tax Cuts. I see it's the bottom of the hour, and we're glad you've joined us today. My name is Jeff Latessa, and I'm a Stakeholder Liaison with the Internal Revenue Service. I'll be your moderator for today's webinar, which is slated for approximately 120 continuous minutes. 

Before we begin, if there's anyone that's with the media, please send an email to the address on the slide. Be sure to include your contact information and the news publication that you're with. Our media relations and Stakeholder Liaison staff will assist you and answer any questions you may have. 

As a reminder, this webinar will be recorded for future viewings. If you're just joining, I want to quickly mention some virtual webinar housekeeping items. First, closed captioning is available for today's presentation and will be available throughout the webinar. Second, you can download several documents by clicking on the materials drop down arrow on the left side of your screen. We've included technical help documents along with a copy of today's PowerPoint and other resources. Third, if you have a topic specific question today, please submit it by clicking the ask question drop down arrow to reveal the text box; type your question in the text box and click send. Please do not enter any sensitive or taxpayer specific information. 

During the presentation, we'll take a few breaks to check in and engage with you. At those times, a polling style feature will pop up on your screen with a question and multiple-choice answers. Select the response you believe is correct by clicking on the radio button next to your selection and then click submit. If you do not get the polling questions, this may be because you have your pop-up blocker on. So please take a moment to disable your pop-up blocker now so you can answer the questions. We've included several technical documents that describe how you can disable pop up blockers based on the browser you're using. We have documents for Chrome, Firefox, Microsoft Edge, and Safari for Macs. You can access them by clicking on the materials drop down arrow on the left side of your screen. 

We're going to take some time and test the polling feature. Here's your opportunity to ensure your pop-up blocker is not on so that you can receive the polling questions throughout today's presentation. This webinar offers two IRS continuing education or CE credits. You can earn two IRS CE credits and a related certificate of completion by attending the live broadcast of the webinar for at least 100 minutes after the official bottom of the hour start time and answering at least four polling questions during this live broadcast. This polling question example to test your pop-up blocker will count towards the polling questions requirement to earn CE credit. So here we go. 

Do you know who the IRS CEO is? A, yes; B, no; or C, the IRS does not have a CEO. Again, the question is do you know who the IRS CEO is? And the options are A, yes; B, no; or C, the IRS does not have a CEO. Take a moment and click the radio button that corresponds to your answer. Now I'll give you a few seconds to make your selection. Alright, so we're going to stop the polling now, and let's see how most of you responded. 

Okay, so I see that most of you, responded C, the IRS does not have a CEO. And, today, we're going to be hearing -- very shortly, we'll be hearing from the IRS's CEO. He'll be giving some opening remarks. So we hope that you did receive the polling question and were able to submit your answer. If not, now's the time to check your pop up blocker and make sure that you have it turned off. 

So now that we've concluded our administrative items, we can move along with our session today, Understanding Trump Accounts, which is scheduled for approximately 120 minutes from the bottom of the hour. Before we meet today's presenter, we have the honor of being joined by a special guest. Frank J. Bisignano is the first Chief Executive Officer of the Internal Revenue Service, managing an agency that collected approximately $5.1 trillion in tax revenue in fiscal year 2024. Mr. Bisignano brings to this role extensive leadership experience from several decades in the financial services sector. 

Widely recognized for his expertise in operational management and technology innovation, Mr. Bisignano has consistently driven growth, improved customer service and led complex organizations through modernization and digital transformation. Alongside his duties as IRS CEO, Mr. Bisignano continues to serve as the commissioner of the Social Security Administration, a position he assumed in May 2025. As IRS CEO, Mr. Bisignano works to advance the IRS mission by sharpening its focus on three priorities; improving collections, safeguarding privacy, and enhancing customer service. These goals will guide how the agency delivers better outcomes for hardworking taxpayers and strengthen the IRS for the future. 

I'm pleased to introduce our CEO, Mr. Bisignano. The floor is yours.

Welcome. Thanks to everyone for joining today's webinar and participating also in the exercises ahead, that we just heard around the polling. But, yes, I am honored, and it's my privilege to be the first CEO of the IRS and to serve in the treasury department for secretary of defense and the President and his great leadership. Trump Accounts are a very important new savings vehicle for American families. At this webinar, I hope you will have a good understanding of Trump Accounts, tell clients, relatives, and friends about what a great investment this is. Enacted last year, as part of the working family tax sets, a new type of individual retirement account that gives children an early financial foundation and encourages long-term savings and financial awareness. Best description of Trump Accounts are the President's own words; this is a pro family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation. Trump Accounts support Treasury's broader goal to strengthen America's financial future. 

Highlights of Trump Accounts are they grow along with the child who will benefit with it. Contributions can be made until the child turns 18. Contributions don't count as income to the child who owns the account in the year they are made. Trump Accounts can receive contribution from different sources, family members, friends, parents, employers, parents' employers, and even some charities. Truly unique feature of Trump Accounts is $1,000 pilot program contribution. This applies to qualifying children born between 2025 and 2028. Contributions will start arriving in accounts July 04, 2026. I'm proud the IRS developed a form used to open an account. One of my favorite, if not my favorite form, Form 4547, is maybe the most aptly named form in IRS history. 

We've had a great start to Trump Accounts. Accounts open for nearly 6 million children so far, more than 1.4 million elections with $1,000 contribution. My request to all of you, spread the word about Trump Accounts. It's a great savings vehicle and is designed to allow for financial prosperity. We want as many as possible to take advantage of this important savings vehicle. As IRS CEO, I'm committed to ensuring the success of Trump Accounts. I'm grateful to be involved with such an important program for the benefit of working families throughout America. And on this 250th anniversary of the United States of America, I say God bless you and God bless America. Thank you for your time.

Thank you, Mr. Bisignano, for that opening welcome. And, now let me introduce today's speaker. We're joined by Mr. Richard Furlong, a Senior Stakeholder Liaison in the Stakeholder Liaison Office of the Internal Revenue Service Communication and Liaison Division. Each year, Mr. Furlong represents IRS at both face-to-face seminars and online webinars where he discusses IRS policies and procedures, tax law updates, tax professional data security, and emerging areas of tax administration. 

He coordinates the Pennsylvania practitioner liaison meetings where PA practitioners, organizations where -- I'm sorry, where PA practitioner organizations meet with the IRS to discuss the latest developments in IRS policies, procedures, and practices and to solicit feedback from the practitioners. Annually, he provides IRS updates on topics including the latest tax law changes, tax professional data security, and IRS tax pro accounts. Mr. Furlong is a graduate of the University of Pennsylvania, Wharton School with a Bachelor of Science degree in Economics. 

And with that, I'm going to turn it over to Richard to begin the presentation. Richard, the floor is yours.

Thank you very much, Jeff, and I hope I'm coming through loud and clear. This is Richard Furlong, and it is my pleasure and privilege to be speaking to you today on our Stakeholder Liaison webinar on the topic of understanding Trump Accounts. As our CEO, Frank Bisignano, just shared with you, the Trump Accounts were enacted last year as part of the Working Families Tax Cuts. So, I think it's appropriate to start with our objectives for today's webinar. And here you should see on this slide the objectives, which we will explain what exactly is a Trump Account under the Working Families Tax Cuts provisions of the 2025 legislation that would be Public Law 119-21. We will describe how and when to open a Trump Account. We will identify the contribution types and the limits for annual contributions for Trump Accounts, and this portion of the program will also include a discussion of the pilot program provisions that are unique to Trump Accounts. Then we'll explain the Trump Accounts growth period rules and the eligible investments for monies going into the Trump Accounts. And then finally, we'll describe the rollover and distribution rules for Trump Accounts. And we also plan to have an extended Q&A session at the completion of the webinar, where I and a colleague will address as many of your questions as possible. So that's a lot to cover this afternoon. So, let's get started. 

Now I do want to mention at the outset, and you see here the disclaimers, this today's live presentation is being given on July 1, 2026, and it reflects information currently available on irs.gov, which should be your trusted source for all information on the Working Families Tax Cuts, including the Trump Accounts. And it will also reflect today's presentation that is the published treasury guidance as of today, July 1, 2026. We anticipate that additional guidance, some forms, instructions, regulations and procedural updates will be added to irs.gov, as issued by Treasury and IRS in coming months. Now please note that this is a high-level overview of Trump Accounts, as enacted under the legislation known as the Working Families Tax Cuts, specifically Public Law 119-21. And this legislation was passed by Congress almost a year ago on July 3, 2025, and the President signed it the next day on July 4, 2025. So we're coming up to the one-year anniversary of the Working Families Tax Cuts. Again, I want to remind you that the presentation is based on statutory language along with IRIS guidance and treasury guidance issued as of July 1, 2026. 

So now moving on, let's discuss what exactly are these Trump Accounts. Now Trump Accounts are a new tax advantage type of savings account. In Public Law 119-21, Section 70204, added the section that addresses the Trump Accounts. And it created a new code section in the Internal Revenue Code. And this code Section 530A, capital A, Section 530A was added to the Internal Revenue Code because of Public Law 119-21. Think of the Trump Account as a type of traditional individual retirement account or IRA, but it is established under Section 530A of the Internal Revenue Code. This Trump Account is for the exclusive benefit of an eligible individual or the eligible individual's beneficiaries and it is designated as a Trump Account at its establishment. 

Now the Working Families Tax Cuts provided for establishing a Trump Account on behalf of every eligible child for whom an election is made. The election to establish a Trump Account is generally made by a parent or a guardian and is made for an eligible individual, and that's an important term, which I'll come back to. It's made for an eligible individual who has not yet turned 18 -- age 18 before the end of the calendar year in which the election is made. Now actual contributions, actual funding to Trump Accounts cannot be made before July 4, 2026. 

So as of the day of this webinar, that is upon us in the next few days. Now additionally, and I suspect many of you attending today already know this, the federal government through the U.S. Treasury will make a one-time $1,000 pilot program contribution to the Trump Account of each eligible child for whom an election is made and that eligible child must be a US citizen, and that child must be born on or after January 1, 2025, and no later than December 31, 2028. So, this is what's referred to as the pilot program provision of the Trump Accounts, and we'll come back to this periodically through the webinar. 

Now parents, guardians, and certain other authorized individuals may establish the Trump Account for an eligible individual. And the term eligible individual is a statutory term for who is eligible to have a Trump Account established. Now an eligible individual is different than the eligible child definition for purposes of the pilot program. An eligible individual for whom the Trump Account is being established is, first, an individual who has not yet attained the age of 18 before the close of the calendar year in which the election to open an initial Trump Account is made. That's number one. Number two, an eligible individual must have a Social Security Number that was issued before the date of the initial Trump Account election. And number three, the individual authorizing the Trump Account must have authorized that an election be made to open a Trump Account. 

And we'll talk about the form and the process to do that subsequently. So, the eligible individual is the owner of the Trump Account. And remember, that's an individual who has not yet attained aged 18 before the close of the calendar year in which the election to open the initial account -- the initial Trump Account that is made. So, the eligible individual owns the Trump Account and is also referred to as the account beneficiary. 

Now coming back to the pilot program, remember the U.S. Treasury will make a one-time $1,000 pilot program contribution to the Trump Accounts of each eligible child for whom an election is made, which is a separate decision, that must be made by the custodian. And that is made for a US citizen. And again, that child must be born before -- excuse me, on or after January 1, 2025 and through December 31, 2028. 

So just because it's important that and we understand we're dealing with new terminology and new concepts here, I just want to repeat that an eligible child, which is different, which is the child who for whom the $1,000 Treasury Department pilot program contribution can be made, is a child born anytime between January 1, 2025 and December 31, 2028, must be a U.S. Citizen, must have a valid Social Security number and the eligible child must not have had a prior election for a pilot program contribution made on their behalf and processed by Internal Revenue Service. 

So of course, we created a new form for this process and as CEO, Bisignano, referred to, it's Form 4547 Trump Account elections and that's both used to establish a Trump Account and also to enroll in the pilot program, for the eligible child. Now the instructions for Form 4547 and the form itself are found on your trusted source, which is irs.gov, and I highly recommend, if you haven't done already, going to irs.gov and downloading both the Form 4547 and its instructions and maybe even printing it out because it's an excellent reference tool, particularly the instructions. 

And it is interesting and very gratifying to all of us here at IRS and Treasury that in essentially the first six months of the process to open Trump Accounts, nearly 6 million of these accounts have been opened. And of those 6 million about 1.4 million were elections under the pilot program to receive that $1,000 contribution from the U.S. Treasury. Now if the election for the $1,000 pilot program contribution is made contemporaneously or at the same time as the election to open the initial Trump Account, and by the way, both can be made on the Form 4547, which we'll show you a bit later. 

So, if the election for the $1,000 pilot program contribution is made at the same time as the election to open the initial Trump Account, the authorized individual is the individual able to make the election for the pilot program contribution. However, if no election for a pilot program contribution is being made at the time the election to open an initial Trump Account is made, then there's a different rule for determining who is an authorized individual. And under the proposed ordering rule issued through guidance by Treasury and IRS for whom they make the election to participate in the pilot program and to receive that $1,000 contribution, the authorized individual would be in order of priority, the legal guardian of the child, the parent of the child and adult sibling or the grandparent, and it's in that order. 

Now some more information on Trump Accounts on our next slide and the slide coming up is very important, and we've already received some interesting questions from attendees today in the chat. So, after we receive those approximately 6 million 4547, the IRS must process them. And after they have processed the authorized individual who had included his or her e-mail address on their Form 4547, they're going to receive an activation email. 

And you want to take a look at this slide as to the email because this is the approved official email from the Treasury Department; no-reply@trumpaccounts.treasury.gov. This is a critical email to act upon because it must be reviewed by the authorized individual who submitted Form 4547 based on the email address that they included in that submission of Form 4547. 

And then there will be explicit and I've been told from a colleague, I have a colleague in Stakeholder Liaison who had a newborn in 2025, and he received this email from no-reply@trumpaccounts.treasury.gov. He received it about two weeks ago. He immediately acted upon it, and he has now activated his account. So, he and his new son are primed to go for the Treasury Department in the very near future to drop $1,000 as part of the pilot program into his account. So, you must activate the account to move forward. 

Now on May 28, we issued a news release and announced some new features of the existing IRS individual accounts. I know that many of you are familiar with IRS individual accounts. You know the great benefit to maintaining one. I would hope that many of the thousands listening today have opened an IRS individual online account. But as was announced on May 28, about a month ago, we make it easier to submit Form 4547 if it has not been done previously through your individual IRS online account. In other words, you do not have to wait until tax season to follow with the 1040. If you're opening up an account, let's say, for a child born in 2026 or even as we'll see, an eligible individual, who meets our requirements and can benefit from other contributions that we'll describe, you want to go into your individual online account to do that process. 

So -- and beginning after July 4, 2026, the Child's Trump Account then can accept contributions from parents, could be family members such as grandparents, uncles, aunts, could be employers setting up a qualified plan, which I'll discuss later and certain other eligible contributors. And there are annual limits, which we'll go into in some detail later. But the key takeaway from this slide is that you must have activated the account. And then beginning, immediately after July 4, this year, our Semi quincentennial, of course, is a Saturday. We anticipate for those accounts that have been activated for those newborns who were born in 2025, the eligible child will begin to receive that $1,000 pilot contribution directly from the U.S. Department of the Treasury deposited into their Trump Account assuming they made the election on the Form 4547. 

Now moving on, let's talk about the contribution and structure rules for the accounts. And these are very important too because they're slightly different from traditional IRAs. So, this slide highlights several of those major contribution and structure rules. Contributions are allowed up to $5,000 per year. Now that $5,000 per year will be indexed for inflation beginning after 2027. So but right now it's $5,000 per year. The limit that -- but however, keep in mind that this limit of $5,000 per year does not apply to the $1,000 pilot program contribution from the United States Treasury, so the $1,000 pilot program contribution is separate and apart from the $5,000 of other contributions, including contributions from family members, qualified general contributions, which I'll define later and possibly qualified rollover contributions from to a trustee to trustee transfer. 

Now what's interesting is that and you see it on the slide here in the second bullet, an employer who follows certain rules can contribute up to $2,500 per employee per year towards the employees or the employees dependence Trump Account without accounting as taxable income for the employee if made pursuant to a Trump Account contribution program of the employer. Now this is brand new. And once employers start acting upon this and they're probably waiting for upcoming guidance from Treasury and IRS to flush out the rules, these programs would be set up by employers to contribute up to $2,500 per employee per year into the employee or the employee's dependents Trump Account without accounting as taxable income for the employee. This would be part of the overall $5,000 contribution, but we anticipate it will open a significant new funding source to make these Trump Accounts even more popular. So, stay tuned for more guidance on that. 

Now how about the investments? Moving on, let's talk a little bit about investments because there are restrictions on investments. The funds as you see here must be invested in eligible investments and those would include mutual funds or exchange traded funds, but they must track the Standard and Poor, the S&P 500 Index or another equity index of primarily American companies that meet certain other requirements. So, this will be the responsibility, and the trustee of the Trump Accounts. And initially, the trustee of the Trump Account as announced by the United States Treasury is Bank of New York Mellon. Other trustees will come into play later this year once guidance is issued, but there will be limitations on the investment because we want prudent investments. We want -- we know that equity markets can do very well over an extended period. Trump Accounts are a wealth building tool, but we are not looking or Congress in passing the statute is not looking for speculative investments. So, stay tuned for more guidance on this. 

So, Jeff, I think I'm going to take a pause here, grab a glass of water and turn it over to you for our first polling question.

Sure. Thank you, Richard. So here we go. Polling question number one. What is the general annual contribution limit for most Trump Account contributions during the growth period? A, $500; B, $1,000; C, $2,500; or D, $5,000. So again, that is, the question is what is the general annual contribution limit for most Trump Account contributions during the growth period? And it's either A, $500; B, $1,000; C, $2,500; or D, $5,000. And just to note, the polling question example that we did at the beginning of the presentation, will count towards the polling question requirement. And for this question, I'll give you a few more seconds to make your selection and/or submit your answer in the ask question feature. 

Okay, so we're going to stop polling now, and we will share the correct answer on the next slide, and we'll look at how we did. Alright, so the correct answer is d, $5,000. And I see that 89% of the people that responded, responded correctly. So that's a great response rate. Richard, I think we are ready to continue.

Thank you, Jeff.  I apologize if I was coming on too strongly. My microphone might have been a little too close, so I've moved it back a bit. We want to make this webinar both informative and conversational. So, hope you can hear me and that I don't appear that I'm shouting. So now let's move well, that is gratifying because we know that the general annual contribution limit is $5,000. So, let's move on to reinforce as to who can open a Trump Account. Now it's very important that if you're a tax pro attending today, and I know many of you are tax pros, that when you're advising your clients or you yourself are making an election to open a Trump Account, that we are all very clear on this definition of authorized individual since only an authorized individual is the one who must make the election to establish the Trump Account on behalf of the eligible individual. 

Now once again, authorized individuals generally include parents, legal guardians, and other individuals permitted to make the election. But remember that the account itself, the Trump Account itself, belongs to the child even though an adult could be the parent, the guardian, or other eligible, individuals permitted to make the election, they are the one making the election, and they will be managing the account while that child is a minor. The accounts themselves are established for eligible individuals. We looked at that definition earlier. An authorized individual must make the election to establish the account and remember the parents, legal guardians, and other individuals. So I think we've covered that on this slide. 

Now we want to tee up for you the Form 4547. And I know a certain percentage of our attendees today have seen the form. As I noted earlier, I think it's important to become very familiar with the form, including if you're submitting the form through your IRS online account. So here we on our next slide, we have a snapshot of Form 4547, Trump Account selections. It's not a complicated return a form, I should say, unlike some of our other forms. It's a one pager. The instructions themselves are only five pages. And as you can see here, it's broken into four parts plus a jurat to sign. Part one is where the parent or guardian or other authorized individual includes their name and information, including their email address so that they can receive that activation email from no-reply@trumpaccounts.treasury address I showed you earlier. In part two is the child's information, detailed. We want to make sure we have the Social Security number of the child, date of birth, relationship, and their home address. And in part two, you check a box if you're the one authorized to open the Trump Account for the child. Part three is simple. You check a box to notify the treasury that the child qualifies for the pilot program contribution. And, of course, we'll be looking at the date of birth to ensure that for the pilot program aspect of Trump Accounts, it is a child born between January 1, 2025, and December 31, 2028. And then you sign it, and then you submit it. 

Now remember, you can make the file this form separately. You can make it, you can file it as we've seen already in the recently concluded tax season, file it with your tax return making the election. And it bears reinforcing because it's important to us here at the IRS that you all know that now as we announced about a month ago in late May that your IRS individual account can be used in a very, very secure fashion, to complete many tasks online, but for purposes of today's discussion, to submit your Form 4547 and to check on the latest submission status, including the next steps to activate the Trump Account. So, in other words, you do not have to wait until tax season to submit the Form 4547. And when we made this announcement, our CEO, Mr. Bisignano noted that this is part of his overall goal, that he's leading the transformation of the IRS into a digital first agency. We want to deliver faster, more seamless experience for taxpayers and help incentivize folks in a very effective easy manner to create these new tax advantage Trump investment accounts to save for multiple purposes. It could be college, retirement, and certainly build generational wealth over years. So look at your IRS individual online account and advise your clients of your tax pro to use that to submit Form 4547. 

Now there is one important caveat, and it's not on the slide, but I want you to keep this in mind because I don't want the processing of Form 4547 delayed. You should not, I repeat, not file a Form 4547 with an amended tax return, a 1040-X. It can be filed either as a stand-alone form with the original 1040 or as we just noted using the individual IRS online account. So, if you filed your client's 1040 or you filed your 1040 for 2025, you did not file the Form 4547, please, please, please do not file a 1040-X with a Form 4547 that will delay the process significantly. 

So now let's move on to another new term created under the statute, which is the growth period. And the growth period is where so much of the benefit of investments on an annual basis of up to $5,000 a year can really show the compounding value of these investments. So, the growth period begins when the initial Trump Account is established and it ends on December 31 of the year that the child turns age 17. So let me give you an example here. A child let's say the child was born late in 2025, let's say on October 01, 2025. So, if I do the math here, if I'm correct, the child would turn age 18 on October 01, 2043. The last day of the growth period for purposes of the Trump Account for this child would be December 30, 2042, because it's in 2042 that the child turns 17. So, on December 30, 2042, excuse me, that's the end of the growth period. Now doesn't mean that the account goes away, then it will become after the growth period a traditional IRA. 

However, during the growth period, a subsequent Trump Account, let's call it a rollover Trump Account, that can be established for the child. Now the rollover Trump Account, however, must be funded by a trustee-to-trustee transfer for the entire account balance from the child's existing Trump Account, and that would be a qualified rollover contribution from Trump Account one via trustee-to-trustee transfer to Trump Account two. Now during the growth period, there are special rules for these qualified Trump Accounts. Only they can only be invested in eligible investments, as we said earlier, mutual funds or ETFs that track the Standard and Poor's 500 or similar equity invest equity index are primarily US companies. A Trump Account has separate contribution limits from other IRAs. So, you can you could possibly have an IRA held in the name of a child separate and apart from the Trump Account, but they must be kept separate, no commingling. 

And there's no deduction allowed by any individual under Internal Revenue Code Section 219 for any contribution to a Trump Account. In other words, these are after tax contributions by the parents, the grandparents, the guardians, the generous uncles, whomever; they're after tax. And very importantly, and here's where a Trump Account is unique, a Trump Account generally restricts distributions from the account during the growth period. However, once the growth period ends, most of the special rules applicable to Trump Accounts no longer apply and then we pivot to the rules governing traditional IRAs and those would generally apply. 

So Jeff, let me take a pause here and turn it back to you for our next polling question.

Thanks, Richard. Yeah. And here we go. This is our polling question number two. Which form allows an authorized eligible individual to request establishment of a Trump account? So that's A, Form 1040; B, Form 1099; C, Form 4547; D, Form 8839. So again, that's which form allows an authorized eligible individual to request establishment of a Trump Account. And it's A, Form 1040; B, Form 1099; C, Form 4547; or D, Form 8839. So I'll give you a few seconds to make your selection. And we and then you will -- or you can submit your answer in the ask question feature. And in case anyone's having a hard time hearing me, I will, I'll speak up -- and I'll read the question again. Which form allows an authorized eligible individual to request establishment of a Trump account? A, Form 1040; B, Form 1099; C, Form 4547; D, Form 8839. And I will give you some time to select. 

Alright, we're going to stop polling now, and let's share the, correct answer on the next slide. And the correct answer is C, Form 4547. And I see that 98% percent of the people that responded, responded correctly. That is great. Wonderful job. And I'm going to hand things back to you now, Richard.

Thank you, Jeff. Boy, I would have been disappointed if it was anything less than 98%, given that we've been emphasizing Form 4547. So now let's turn to the five different types of contributions conceivably that can be made into a Trump Account. And this bears some close attention, by everyone here because it can be five possible contributors to the Trump Accounts. We've covered in the first bullet, and we will continue to cover the $1,000 pilot program contribution from the secretary, that's the secretary of the treasury, for an eligible child. 

I did mention earlier, qualified general contributions, and this is a specific term in the statute that created Trump Accounts. Qualified general contributions are funded by states or political subdivisions, could be funded by The United States, the District of Columbia, Indian Tribal Governments, or Section 501(c)(3) tax exempt organizations. But these qualified general contributions must be made for members of a qualified class of account beneficiaries. So, we anticipate more detailed guidance coming forthwith from Treasury and Council. As I mentioned earlier, we're also anticipating guidance upcoming sometime in coming months on the employer contributions, which is the next bullet on this slide. These are also referred to as Section 128 contributions, where the employer can contribute to an employee for a Trump Account of up to $2,500 and as I noted earlier, it will not be included in that year in the gross income of the employee under Code Section 128. 

We also touched briefly on qualified rollover contributions, which again are transfers, of a rollover to a rollover Trump Account from an existing Trump Account, but it has to be of the entire amount of the trials in the prior Trump Account. So, in other words, you could not do a partial rollover from Trump Account one to a new Trump Account two. It would have to be an entire, trustee to trustee transfer of the entire amount in Trump Account one to Trump Account two. And then contributions from other sources, those would be, the beneficiary himself, him or herself I should say, the parents, the guardians or any other person. So, you have five potential sources but remember the $1,000 pilot program contribution does not go against the -- excuse me, the $1,000 pilot program contribution does not go against the annual $5,000 maximum. So, contributions cannot be made before July 4, 2026. So, in the latter part of this year, that's when we anticipate both through the pilot program contributions to those children born in 2025 and possibly in 2026 that we're going to see those monies coming in and then the monies, the funds from the other four sources listed on the slide. 

Now since this -- we're a tax agency, you're probably asking yourself what about the taxation of contributions? Well, the contributions to a tax Trump Account during the growth period, as we defined it earlier, are not includable in the income by the account beneficiary were made. However, the pilot program contributions, which is the $1,000 the qualified general contributions from those funding sources in bullet number two on the slide, the Section 128 contributions, those three categories of contribution do not create tax basis in a Trump Account. However, qualified rollover contributions from a transfer from a prior Trump Account to a new Trump Account would carry over any basis attributable to the funds being transferred. But what does create tax basis in a Trump Account are contributions from other sources during the growth period and that would include the contributions from the parents or any other persons. Those would be being made with what we call after tax dollars. So, this is very similar to IRA rules and you might want to take a look at Publication 590-B on the taxation of distribution from traditional IRAs, which address basis rules when determining the taxable portion of distributions. 

So, continuing, moving forward, we're just going to reinforce a couple of points here on our next slide on the contributions to the Trump Account. So, I think we all now are aware of the one-time $1,000 contribution under the pilot program. It's set in statute as a four-year period for this pilot program. And so that's why the Trump Accounts themselves are permanent, but the pilot program for the Treasury Department funding of up to $1,000 is only for those newborns born between 2025 and 2028, so that's why it's referred to as a pilot program. Remember that for the treasury to make that contribution of $1,000 the child must meet all the statutory eligibility requirements, including citizenship and birth year requirements. And I do want to mention here because we did get an early question before today's webinar began. Someone of the attendees noted that he submit he submitted the Form 4547, and he had the incorrect birth date of the child. So and if that child, was a child born in 2025, but he had the wrong birth date and it does not allow us to activate that account, he should go into his IRS online account to submit a Form 4547 so that we can cross check the birth date against the records received by IRS from the Social Security Administration.

 So once again, the child must, for purposes of the pilot program, must be born between 2025 and 2028, have a valid Social Security number before issued before the Form 4547 is submitted to the IRS, and that child must not have had a prior pilot program election made by any other individual and processed by treasury because it can only be one pilot program contribution by the treasury to one eligible child. And one thing to keep in mind, when we're talking about the pilot program and who should be submitting via the Form 4547 and making the election in Part 3 of the form, it should be made by the individual who anticipates that this eligible child who meets all of these requirements will be his or her qualifying child for the taxable year during the year the election was made. In other words, they anticipate that they will claim that child, let's say for purposes of the child tax credit on their tax return for the year in which the election was made. 

Now on our next slide, just to reinforce, some of these points and that's really the purpose today, really to have you go away with a very clear understanding of the basic rules of Trump Accounts. Because, unfortunately, there is misinformation out there on sources that are not trusted the way you should trust irs.gov. So, moving on here, we see contributions again are allowed up to $5,000 per year. And when you go to the treasury Trump Accounts web page, they have a graphic, which will show how the money the investments compound over an extended period. And it's quite remarkable to see how these funds can grow if a $5,000 contribution, let's say, is made from the, from the time the child is born through the growth period up until, the year in which they turn age 17. And once again, it bears repeating that the $1,000 pilot program contribution along with the qualified general contribution from state, local governments, possibly tax-exempt non-profits and the qualified rollover contributions from Trump Account one to a new Trump Account, they are not counted towards the $5,000 limit. And we'll show how that's tracked a bit later in the presentation. 

Now I just want to reinforce the point about the employer contributions. Remember, I referred to that as a Section 128 employer contribution, which can be made to the Trump Account by an employee of the employer who sets up one of these 128 plans or a dependent of the employee, the dependent who has a Trump Account in their name of the employee. And during the growth period, the Section 128 employer contributions have an annual $2,500 limit that will be adjusted for cost-of-living adjustments beginning after 2028. So, these Section 128 employer contributions plus the contributions from other sources, excluding the treasury pilot program contributions, the qualified general contributions and the qualified rollover contributions, the Section 128 contributions and the contributions, let's say, from parents and family members, they would be subject to a $5,000 annual limit. So theoretically, you could have $2,500 being contributed to a Trump Account by an employer under a Section 128 plan and then the other $2,500 -- up to another $2,500 could be contributed by others. And remember again, and this is why once these are established by employers who understand their responsibilities based on upcoming guidance from IRS and Treasury, these 128 plans could be very, very attractive to employees of employers who set these ups to get basically a pretax contribution each year of up to $2,500 that would not show up as taxable wages on their W-2. So stay tuned for more information on that. 

And Jeff, I will pause here and turn the microphone back to you for our next polling question.

Sure. Thank you. So, now we're going to do polling question number three. Which contribution type provides a one-time $1,000 federal deposit for eligible children upon election, A, qualified rollover contribution; B, pilot program contribution; C, employer contribution; D, general family contribution. Again, the question is which contribution type provides a one-time $1,000 federal deposit for eligible children upon election, and that is either, A, qualified rollover contribution; B, pilot program contribution; C, employer contribution; or D, general family contribution. Now I'll give you a few seconds to make your selection or submit your answer in the ask question feature. 

Okay. So what we are going to do is we're going to stop polling now, and we will share the correct answer on the next slide. And the correct answer is B, a pilot program contribution. And 97% of you responded correctly, which is another great response rate. Richard, it looks like the audience is with you still. So, I will hand it over to you to continue.

Well, that's very gratifying, Jeff, that I haven't put everyone to sleep or hopefully not most of you. So, let's move on now to some interesting aspects of the Trump Account on the contribution limits during the growth period, because these rules are separate and apart from the traditional IRA contribution rules that many of you are familiar with. Now during the growth period, the contributions are now subject to the regular IRA contribution rules. That will change after the Trump Account after the beneficiary of the Trump Account exits the growth period basically in the year, they turn age 18. There will be adjustments for the contribution limits as we alluded to earlier beginning after 2027 based on cost-of-living adjustments. And we talked about the fact that certain contribution types do not create tax basis while others do. And remember again, so to that point, the $1,000 pilot program contributions from Treasury, the qualified general contributions and the Section 128 contributions do not create tax basis, and we'll see in a moment how that is reflected on an annual information reporting by the trustee. 

Now moving on about the investment choices during the growth period, because we want to make sure these investments are protected, that they're safe. They must be eligible investments under the statute. Funds must generally be invested in approved mutual funds or exchange traded funds also known as ETFs that are tied to major American equity indexes. Investments involving excesses fees or leverage are not permitted during the growth period. These restrictions are intended to encourage long-term saving and reduce investment risk during the childhood of the beneficiary of the Trump Account. So, there are limitations on the investments, but they're safe limitations, and they will track the overall equity markets. We don't want investments or we being Congress, in passing this legislation, don't want risky investments that use leverage or where the custodian of the trust account has high fees. And then after the Trump Account and these Trump Account investment restrictions, they end, as I mentioned, after the growth period and then we would convert to traditional IRA rules, which might allow for a wider opportunity once the child turns age 18 and they take full control of the account for their investments. 

Now let's look at a new draft form, and this is an important form. You probably haven't seen it yet. I doubt that you have. It's only out in draft form. On the next slide, it's draft Form 5498-TA. It was issued on April 9. It's available on irs.gov. The draft instructions for this form were issued on May 2. Now generally speaking at our Stakeholder Liaison webinars, we have a pretty -- we not only have a large audience, but a sophisticated audience who provide various types of tax and advisory services to clients. So, you're many of you probably are familiar with the Annual Form 5498, which is provided must be provided to the owner of an IRA by May 31 each year. So, it's an annual statement showing activity within the IRA. So now we've created a draft version of Form 5498-TA. And these are instructions that I mentioned are also out on irs.gov for the trustee. And any calendar year during the growth period of the account beneficiary, it will be the requirement of the trustee once this form is finalized later this year to begin filing Form 5498-TA. And they will file it with the IRS and then furnish a copy to the account beneficiary for each Trump Account maintained during the year. And then after the growth period ends, once the child reaches maturity, age 18 and beyond, when it transitioned to a traditional IRA, then the custodian will file the form I just mentioned, the form with which you're very familiar, many of you, Form 5498, IRA contribution information. 

So, let's look at a couple of boxes here on the form itself. In box one, you see pilot program contributions and qualified general contributions. So, remember the pilot program contribution, if any $1,000 would be reflected in box one plus any qualified general contributions made from state or local governments, 501(c)(3) that would be box one. Box two would be any qualified rollover contributions from through a direct trustee to trustee transfer. So, it would show the money coming into the new or the receiving, I should say, Trump Account in box two of the Form 5498. Box three would be the Section 128 Employer Contributions. Box five will be the basis of our investment in the contract that of course can be an important box for calculating the taxable portion of distributions when they're coming out. The distribution now -- remember during the growth period, distributions are almost never made. I'll talk a little bit later about the limited circumstances in which a distribution can be made during the growth period. And if there was a total distribution of a Trump Account was made for the year, then the trustee would not have to file a Form 5498 to reflect the fair market value because as of December 31, in the year of the total distribution, the fair market value obviously would be zero. And so you'll start to probably see this for your Trump Account beneficiaries, I would say sometime in 2027 once we finalize this form going forward. 

So now moving on, let's just come back and reinforce a couple of points about rollovers. Now you note that earlier in the discussion, I mentioned that it was the Treasury Department that announced this spring that initially the bank, the major bank that has entered into an agreement with the United States Treasury to be the custodian of the Trump Accounts will be Bank of New York Mellon. But over time, there will be other financial institutions that meet the rules to offer Trump Accounts to interested parties, and then they would be the ones accepting rollover contributions. The rollover transfer must be a trustee to transfer, from the existing Trump Account to an incoming Trump Account or a new Trump Account. It must be a transfer of the entire balance of the account that bears repeating. 

So, you can't take some of the investment out and transfer trustee to another Trump Account. It must be the entire amount because you can only have one funded Trump Account per child at any one-time. That's a key point here for today's discussion. Whereas you could have multiple IRA accounts, very common, but you can only have one funded Trump Account, per child during the growth period at any one-time. Now there are special rules that apply to rollovers to the account beneficiaries’ ABLE account. ABLE is an existing provision of the Internal Revenue Code. It refers to Achieving Beneficial Life Experience. These are very attractive accounts with -- for certain individuals who have certain disabilities. And there can be a qualified ABLE con rollover contribution from a Trump Account to an ABLE account but made during the calendar year in which the child turns age 17. 

Now let's move on to withdrawals because here's where you must be very careful and make sure you understand the rules if you're advising clients or even looking into these for family members and friends, because they are restrictive during the growth period. During the growth period, generally distributions cannot be withdrawn until December 31 of the year before the child turns 18. And after that point, the account is generally treated as a traditional IRA. But you know the rules for traditional IRAs. So, after the growth period, the rules that apply to traditional IRAs, most of them will apply to the Trump Accounts, which then have become traditional IRAs. And of course, that would mean that many distributions from these accounts will be subject to the 10% additional tax under Code Section 72(t) unless there's a certain exception applies with respect to the child, for example, the distribution from higher education expenses or first-time home purchases. But remember, I'm talking here now about the 10% penalty after the growth period, after it becomes a traditional IRA. 

And we will keep you up to date with future IRS guidance and additional details regarding distributions, reporting and tax treatment. But remember, generally, because these are intended as investment of vehicles with long term growth for children to build wealth for those children long term and maybe to encourage them and help them understand the value of IRAs once they exit the growth period. Generally, monies cannot be withdrawn during the growth period but after the growth period, many of the traditional rules of IRAs will apply. And we have more information detailed on this, again, I would refer you back to the instructions for the Form 4547, which I mentioned earlier. 

And, Jeff, I think we're ready for our final polling question, our final substantive polling question that is. Jeff?

Yeah. Thanks, Richard. Yeah. We have so we have one more polling question, and then we'll do a little bit later an attendance check as well. So polling question number four. Who may generally open or manage a Trump Account for a child? A, only the child's employer; B, only a tax preparer; C, an authorized individual such as a parent or guardian; or D, any unrelated business owner. So again, the question is who may generally open or manage a Trump Account for a child, and it's either A, only the child's employer; B, only a tax preparer; C, an authorized individual such as a parent or guardian; or D, any unrelated business owner. So, I'll give you a few seconds to make your selection, or submit the answer in the ask question feature, and then we'll take a look at the next slide. Though, we'll take some time to answer the question. 

Okay, so we're going to stop the polling now, and let's share the correct answer on the next slide and see how we did. Alright, so the answer is C, an auth an authorized individual such as a parent or guardian. And 99% of the people that responded got that correctly, which is a great job. So, the speed continues. I will pass things back over to Richard.

Thank you very much, Jeff. So, as we head into the home stretch and we get ready for our Q&A, just a couple of things, as this slide shows, what we know as of today and what is coming. So, we know that the Trump Accounts were created under the 2025 legislation. We're now referring to it as the one -- excuse me, as the Working Families Tax Cuts, Public Law 119-21. They are established for an eligible individual. We defined that term earlier at multiple points throughout today's session by an authorized individual, and we also defined that term. We also talked about the Form 4547 used to make the election, and now it can be filed electronically through your IRS online account. I think we're all familiar now with the federal pilot program where the United States Treasury will contribute up to $1,000 to each eligible child upon election. And then those special rules applying to investments, rollovers, and distributions applied during the growth period. 

Now there's more to come. On the right hand slide here, you see we will be issuing additional IRS and Treasury guidance and instructions. I know I subscribe to the e-news for tax professionals so that I can get updates on that guidance once it's issued. I recommend it to all of you if you don't already. There will be guidance, as I said, on the qualified general contributions and we anticipate guidance on the Section 128, employer contributions. We'll have guidance for the trustees on their reporting requirements as we finalize the Form 5498 and instructions that reflect that guidance, so there's more to come on that. Stay tuned for more and we will provide that to you in coming months. 

And now let's move on to the resources that have been issued to date. And on this next slide, we began very early on after the legislation was passed and then we moved pretty aggressively. We, on July -- on June 29, and we'll talk a little bit later in the Q&A about this news release issued, within the past week by our 2026-80 provides a safe harbor that can be beneficial to eliminating the need to file a gift tax return. And my colleague, Filomena Mealy, and I will come back to that during the Q&A. The second link links over to the irs.gov landing page on Trump Accounts. During tax season, we provided some early indicators of the take up on Trump Accounts. As you see on March 31, at that time, it was 4 million. CEO, Bisignano noted today it's now over 6 million, up to 1.4 million children, having the election for the pilot program. And then on March 6, slightly earlier, we issued proposed regulations on how to open the initial Trump Account. I recommend those news release because you can go back at irs.gov. They're listed under the news section tab at irs.gov, and you can look at them in chronological order. 

Moving on, we also issued a second news release on March 6, which provided guidance on the pilot program, that was IR 2026-31. On December 02, 2025, our first news release on our next slide, IR 2025-117, the news release dated December 02, 2025. That news release links over to a notice, and it had preliminary guidance in a Q&A format on many of the detailed provisions of the Trump Accounts. The March 6 news releases, the news release 31 and then the news release 33, both issued on March 6, they both link over to proposed regulations. And as you all know, I think you all know with proposed regulations, we have a commentary period, comments are submitted by many different stakeholders and then Treasury and our Chief Counsel will go back and ultimately it's your final regulation. So, we'll be looking for that in coming months. 

And then I just want to note here on this slide the Form 4547, you can look for any updates there. And then trumpaccounts.gov jump starting the American Dream, that is the Treasury Department website. And that has a calculator to show depending upon the funding annually going into Trump Accounts, how they can grow over an extended period of time well into the maturity of the child for whom the Trump Account is open. So, it really puts a hard number or forecast on how these accounts can grow and it's a real eye opener you might want to check that out. 

Excuse me. So now let's, just wrap it up before the Q&A with, just a reminder through our glossary of some of the terms. And you all have these slides that our team provided to you today. So, you see the annual contribution limit. I think we all know it's $5,000 per year plus any $1,000 pilot program contribution, along with any qualified general contributions from tax exempt non-profits or state and local government. Excuse me, I just had to mute myself to muffle a cough. Plus any qualified rollover contributions do not count towards the $5,000 annual contribution limit. We talked about the authorized individual, which is the parent, legal guardian, adult sibling of the child or a grandparent. But contributions can come in from other sources, and they certainly will begin after July 4. Grandparents, relatives, friends and others may contribute as long as you don't want to exceed that $5,000 maximum because then you could be subject, to an excess contribution penalty. 

Moving on in our glossary on the next slide, an eligible child must be a U.S. Citizen with a valid Social Security number and meet the requirements established under law and IRS guidance. So remember, an eligible child is defined for purposes of the pilot program contribution. And again, I would refer you to the instructions for Form 4547. They're very helpful. We all now know about the growth period, can be extended. So, my colleague and Stakeholder Liaison who had a, is the parent along with his wife of the newborn in 2025, he has a growth period of seventeen years. So, there's a lot of opportunity to build wealth for that child through the Trump Account over that period of time. But the growth account growth period, excuse me, ends, when that beneficiary turns in December 31 -- on December 31 of the year in which that beneficiary turns age 17. And during that growth period, there's special rules that limit the withdrawals and control how the contributions and investments work. We talked about the pilot program contribution. I think we're all clear on that. 

Moving on, in the final slide of the glossary, the qualified general contributions. So remember, when you hear that term or read that term, see that term in the media or on irs.gov, qualified general contribution is a contribution made by the secretary, pursuant to a general funding contribution made by a state or political subdivision of The United States, could be the District of Columbia, could be an Indian travel covering, and/or it could be a 501(c)(3) tax exempt non-profit. But these are all under the umbrella term of qualified general contributions to Trump Accounts for a qualified class of account beneficiaries pursuant to a Trump Account contribution program and anticipate more guidance in this area coming up. 

And then finally, we talked about rollover contributions here, transfer of one Trump Account directly to another account without creating a taxable event where you'd have to recognize income as long as you have a direct trustee to trustee transfer of the entire amount of the Trump Account to the receiving Trump Account. And then finally, on my last slide before I turn it back to my colleague, Jeff, the section 128 employer contribution, which I know I'm looking at very closely for additional guidance. This would be money that an employer contributes to a Trump Account for an employee or the employee's dependent and that is limited annually to $2,500 per year per employee. 

So with that, Jeff, I think I'm going to turn it back over to you and you can introduce my colleague, Filomena, and we'll start with the Q&A portion today, Jeff.

Great. Thanks, Richard. Before we begin the Q&A, we are just going to take some time for a final polling question, which is actually just an attendance check. So please select the radio button on the screen. If you do not receive the polling question, add only the letter A as your response in the ask question text box. That'll time stamp your response. So I will, I'll give you a few more seconds to select the radio button in the ask questions feature, and then we will start the Q&A. So, let's take a few seconds. Alright, so we're going to stop the polling now. Thank you for responding and participating in all the polling questions. This is the final polling question and now we are going to start the, the Q&A. 

So thanks, Richard, for an amazing job, very comprehensive presentation on the topic. And now we are going to start the live Q&A. So I'll be moderating the session. But before we start, I want to thank everyone for attending and staying engaged during today's presentation, Understanding Trump Accounts. If you have not input your question, there is still time. So, you can go ahead and click on the drop down arrow next to the ask question field, type in your question, and then click send. Richard is staying on with us and will be answering your questions, but we're also going to be joined by Filomena Mealy. Filomena is a 38 year veteran and currently serves as a management and program analyst in the Stakeholder Liaison planning special projects office that focuses on the implementation of strategic outreach efforts to the tax professional and small business community. Prior to that, Filomena was a relationship manager in the tax outreach, partnership, and education branch of the Internal Revenue Service. And Filomena has also held several positions ranging from auditor, quality reviewer, electronic filing coordinator, and earned income tax credit coordinator. 

So one thing before we start, we may not have time to answer all the questions submitted, but we'll answer as many as time allows. So, with that, let's jump right in so we can get to as many questions as possible, before we need to wrap up the session. 

So, I am going to pull the first question. So the first question is, if a child qualifies for the federal $1,000 pilot contribution, may the parents also contribute additional money during the same year?

Jeff, this is Filomena. Would you like for me to answer the question? I'll be more than happy to.

Sure. Yeah. Filomena, that -- if you can go ahead and answer that, that'd be great.

Well, first of all, the question was, I guess, you said, if a child qualifies for the federal $1,000 pilot contribution, may the parents also contribute additional money? And the answer is yes, absolutely. The parent and basically anyone can still contribute additional money to the account during the same year. Of course, this is a subject to the annual contribution limit, which Richard discussed, which is $5,000. And, yes, basically, also as the CEO open, basically, anybody, whether it's a parent, friend, employer, they can all contribute.

Great. Thank you, Filomena. So another question, and this is either for Richard or for you, Filomena. Does the annual $5,000 contribution limit apply separately to employer contributions and other contributions or does the IRS combine the amounts together?

Why don't I take that one because it sort of ties into the draft Form 5498-TA, which I discussed, which disaggregates the contributions. Remember, they can be up to five different sources going into one Trump Account, and there can only be one Trump Account for the, owner the beneficiary of the Trump Account. So the -- if I understand that question, the $5,000 contribution amount applies to all of the --it applies to the total contributions going in exclusive of the $1,000 pilot program. So remember but of that $5,000 the maximum that an employer can contribute to an employee's Trump Account or the beneficiary of the employee's Trump Account in any one year is $2,500 And it's all broken out in those boxes when in the new Form 5498-TA, the annual form that we will once finalized, the trustee will be required to furnish to the custodian the Trump Account, by May 31 of each year. So I hope that clarifies it a little bit, Jeff.

Great. Thanks, Richard. Another question we received, will contributions to a Trump Account affect financial aid eligibility for college planning purposes?

Jeff, how about I if I take this one. First of all, I just kind of want to preface that, you know, Richard and I have done this presentation a couple of times, and this question seems to keep popping up. And as a parent who's actually had two children who's gone through that whole FAFSA financial aid for, like, over eight years, I can understand why this is such an important question. But I kind of want to also preface the fact that as an IRS employee, really, our role is to really focus on the treasury and IRS guidance and covers basically the tax treatments. So what I would recommend if somebody does have that type of question, I suggest that they actually go and look to the Department of Education's website to see what type of guidance is out there. Because of the fact that we've had this question so many times, I've actually gone and looked at the website. 

And at this point, nothing has showed up, as of yet, but I suggest, hey, stay tuned because I believe it will be a very popular question and it will be addressed. Generally, when FAFSA or Department of Education puts out this information, usually as early as October of each year, they usually list information as the criteria. And when -- many times when the actual application is submitted, they can submit the FAFSA application when they file their tax return, and there, they will list also the criteria of what is actually eligible. So, again, I say stay tuned. There'll be more for this. And, definitely, if you have a client who brings up this question in the interim, just refer them to the Department of Education's website. Hopefully, that kind of answers the question.

Great. Thank you, Filomena. So another question that we received, if the child dies during the growth period, what happens to the account balance?

So I can handle that one. In that unfortunate circumstance, if the child died during the growth period. So if the child who is the account beneficiary dies during the growth period, then there are certain rules under new code Section 530A. They're specifically under 530A(d)(6), and they would apply. So what happens then, the account ceases to be both a Trump Account and an IRA as of the date of death. And in that case, the account is treated as if all of the assets of the account were distributed on the date of death. And as a result, gross income of the inherited beneficiary will include the fair market value of the assets as of the date of death reduced by any tax basis as we were discussing. Now if the inherited beneficiary of this state of the child of the account beneficiary, in other words, the inheriting beneficiary of the child who had the Trump Account who's now deceased, that amount will be included in the gross amount of the account beneficiary for the last taxable year of the account beneficiary. And that's pretty much directly from the statute. So if the child dies during the growth period, then it ceases to become a Trump Account. It does not become a traditional IRA, and it's treated as if there's a distribution of all of the assets in the account with the subsequent tax impact. And I think that's also addressed in, if I'm not mistaken, and Filomena might correct me if I'm wrong, in the Q&As on that December 2 news release that we issued.

That's correct.

Great. Thank you. So another question. Can employers restrict Trump Account contributions only to highly compensated employees?

So, Jeff, I'll take that one. Basically, the answer is no. Employer contributions fall under the Internal Revenue Code Section 128 and is subject to the nondiscrimination rule. So the answer is no.

Okay. Thank you. Another question. If a taxpayer changes financial institutions, may the taxpayer transfer the Trump Account to the new financial institution during the growth period without creating a taxable event?

Yes, I can handle this one, Jeff and Filomena, because it's a question that I've received. I do some seminars and webinars in my area of the country that are sponsored by financial institutions. And so we talked about the trustee to trustee transfer. It's a qualified rollover contribution during the growth period. And if it's a contribution of the entire amount of the Trump Account through a rollover, trustee to trustee transfer, then it avoids immediate taxation. So, again, there's a specific definition of qualified rollover contribution, which again is an amount paid direct trustee to trustee transfer from a Trump Account maintained for the benefit of an account beneficiary to another Trump Account, the receiving Trump Account maintained for that same beneficiary, but it has to be the entire amount of the Trump Account. 

So one thing I'm watching and perhaps you many of you are watching to see if other once the guidance to the trustees is finalized and issued, will other financial institutions start offering Trump Accounts that can receive rollover trustee to trustee transfers? From initially, it would be the financial institution that is the sole custodian of the Trump Accounts, and that's Bank of New York Mellon as announced by the treasury secretary a couple of months ago. So stay tuned on that. But it has to be the transfer of the entire amount of the Trump Account to a incoming or newly established Trump Account at another financial institution. So I think we'll probably be seeing more financial institutions offering Trump Accounts, once further guidance. Jeff, back to you.

Great. Thanks, Richard. Now, may taxpayers use Trump Account funds to pay for education expenses before age 18?

Jeff, I'll take this one. Basically, the short answer is no. They cannot. The statute states that the distributions do not occur during the growth period. Again, that period from when it's established up until the time they're age 18, other than for those qualified rollovers as, you know, Richard previously just discussed in the last question. So let me just also kind of preface with this. Now remember, once the gross period expires and the child does turn 18, the Trump Accounts becomes a traditional IRA account. So they actually after they turn age 18, they can actually then take a distribution, but they should be concerned about the, I guess, IRC Section 72 where if you do take out an early withdrawal, you could be subject to a 10% early withdrawal penalty, and you have to fill out the Form 5329. But, again, even with that situation, there are exceptions where, for example, if they purchase a house or they use it for educational expenses, they may be able to not pay for that early withdrawal penalty. But for the actual question where it said is before age 18, no, they really can't take out a withdrawal.

Okay. Thank you, Filomena.

That's good stuff. You're welcome. 

Sure. Now will the IRS create a separate information return specifically for contributions to a Trump Account during the growth period?

Well, that's a give me. That's an easy one because we've touched on it numerous times. It's the Form 5498-TA. But remember, that's only out in draft form. And as probably many of you know, we do -- not only do we allow or encourage substantive comments on IRS and Treasury guidance through proposed regulations, but we also whenever we create a new form or modify an existing form, we put it out first in draft and we provide a very effective mechanism for stakeholders to comment. Now I have not seen the comments on this, but, yes, there will be a form and information return and it will be Form 5498, Trump Account contribution information, Jeff.

Great. Thank you, Richard. Another question we received. Can taxpayers open Trump Accounts for adopted children?

I'll take that one. Yes, absolutely. Adopted parents may elect to open up an additional Trump Account for their adopted child. They do have to meet the requirements to be an eligible individual. And if I can just also put a shameless plug in for anyone who is adopting a child, we just recently, did a YouTube -- IRS YouTube webinar. It's available, again, on our IRS YouTube channel. We did this back on January 21 that covers the adoption tax credit, so just wanted to throw that out there.

Great. Thank you. So another question, will the $1,000 pilot program contributions be automatically deposited in Trump Accounts for eligible children? 

So I'll take this one because it's an important question and we want to make sure everyone is crystal clear on the answer. And the answer is to the question, will a $1,000 pilot program contribution be automatically deposited in a Trump Account for eligible children? And the answer is no, because as we noted earlier, there must be an affirmative election that's required by statute for an eligible child to receive $1,000 pilot program contribution to the child’s Trump Account. So that affirmative election is made on the Form 4547. As we noted earlier, it's in part three, it's a checkbox. But, secondarily, that account has to be activated so that the Treasury Department after July 4, on or after July 4, can contribute the $1,000 pilot program contribution. And one thing I will tell our audience today, if you're not already familiar with Stakeholder Liaison, our job is not only to share the type of information we're sharing today, but to get ongoing feedback on IRS policies, programs and procedures and Filomena and I have worked very closely in that regard with the new legislation. 

So we're very interested, we capture all of the questions today, all of the feedback, and that helps us moving forward in crafting additional outreach material and public facing guidance for the public. So we're very -- we're watching very closely for the initiation of the $1,000 pilot program contributions that will begin very soon. Since today is July 1, 2026, the day of this live webinar, July 4, 2026, on the statute is after that date is when contributions can be made. We will be watching. And once the election is made initially on the Form 4547 then processed by IRS, and then as we noted earlier, the account is activated. We're looking forward to the many, many -- maybe a million or more Trump Accounts getting that initial $1,000 contribution in the very near future. But it's not automatic. It has to be an affirmative election on the Form 4547, and then the account has to be activated. So I hope I'm clear on that, Jeff and everyone.

Yes. Thank you, Richard. And we also got a question about how should practitioners explain the difference between a Trump Account and a non-retirement custodial savings account?

Well, I would say Trump Accounts are a special type of individual retirement accounts that are subject to special federal tax rules, has contribution limits, special investment restrictions, special distribution restrictions, and special reporting requirements that the non retirement custodial savings accounts just don't need to even have to follow. And I would explain it that way.

And if I can just add that Filomena is very clear on that. I can tell you recent months when I've talked about some of the guidance issued on Trump Account, some of the advisors in the audience asked me, well, what about -- and you're probably many of you are familiar with the 529 accounts that have been around for decades, and they are a form of tax deferred savings accounts, but they are subject to different rules, very different rules than the Trump Accounts. There's nothing to prevent a parent from having an existing 529 account or setting one up for that purpose following those rules, and they're described in IRS publication 970 on education benefits, but also setting up a Trump Account for a eligible individual. So there are -- and as Filomena noted, there are opportunities for non retirement custodial savings accounts, which parents can set up. So this just adds to the mix of ways to save in a tax effective way for children moving forward. So I just wanted to throw that in, Jeff.

Alright. Thank you, Richard. Now can taxpayers maintain both a Trump Account and an ABLE account for the same child?

I can take that one. And, yes, they can. We talked about the fact that when the child who has a Trump Account turns age 17, they could, through a trustee to trustee transfer, transfer the full amount of the Trump Account to an ABLE account, but there could be children with existing ABLE accounts in their name. The parents are making contribution. ABLE accounts are also a tax advantage, tax deferred, if you call it by that name, way to save for those who have certain disabilities, but there's nothing to prevent the authorized individual from establishing a Trump Account and fund that separately from the ABLE account. So eligible beneficiaries can maintain multiple qualified account types, meaning one Trump Account and then an ABLE account, if the accounts -- each of those accounts meets separate legal and tax requirements. So the answer could be yes, Jeff.

Thanks, Richard. And kind of a general question, what is the most important operational recommendation practitioners should provide to their clients?

I tend to think probably the most important recommendation is to tell the clients to try to maintain accurate records, and possibly the second would be to monitor the contribution limits. And when I say to keep good records or maintain the records, I mean, keep a copy of the Form 4547, keep copies of their annual 5498-TA statements when they receive that, and, hopefully, they'll bring that to you when they're ready to file the return.

Thanks, Filomena. And another question, will taxpayers who contribute to a Trump Account be subject to gift tax rules?

This is a question that Filomena and I and our colleagues in communications and liaison have been hearing frequently through various stakeholders. So we have some late breaking news. And we announced on Tuesday -- on Monday of this week, June 29, through a news release. It's not in your slide deck because the slide deck was finalized, but you may want to write down this news release and go to irs.gov. It's IR-2026-80 dated June 29 and the title of the news release to the question just asked Jeff, Treasury and IRS provide safe harbor for certain contributions to Trump Accounts under the Working Families Tax Cuts. So the safe harbor and, identifies circumstances under which a gift tax return, which is a Form 709, if certain safe harbor requirements are made for contributions to a Trump Account, then the gift tax return does not have to be filed under the safe harbor. And in that news release, our CEO, Mr. Bisignano, noted that and we this shows you how we do listen to comments after legislation is passed where we may have to fill in the gaps in a very important way. And this is very important because, as was noted in the revenue procedure that is attached to the news release, and you may want to write down this Rev. Proc., it's revenue procedure 2026-25, which establishes the safe harbor. 

And this if all of the requirements of the safe harbor are met, it will eliminate the need, to file a gift tax return for contributions to a Trump Account, for a beneficiary. So let me just back up here because I think we have a couple of minutes here, Jeff, on this and just give you the overview, because the intent here is to minimize, if the safe harbor provisions are met under Rev. Proc. 2026-25, the necessity to file a gift tax return and that could be a substantial burden because as noted in the Rev. Proc., and as noted well, as noted today, 6 million elections to open Trump Accounts. On our most recent public data, we only receive about 300,000 gift tax returns every year. So without this safe harbor, we could be seeing millions of additional gift tax returns filed, for contributions to a Trump Account. So what this basically -- what the Rev. Proc. says, and it's not a long Rev. Proc., it's only about nine pages, that if the -- and we're looking at the responsibilities of the contributor who's contributing to a Trump Account, whether or not they have to file a gift tax return. And, generally and most folks who file a gift tax return, and many of you have filed it, it's not a difficult return, it can be filed electronically now, but it ties in with the estate tax return and most folks, when they're when they die, their estate is not subject to an estate tax because most folks who pass away have an estate of $15 million or less. But there could still could be a gift tax requirement if you make a taxable gift of over the annual exclusion amount, which is currently $19,000 or, and this is where the Rev. Proc. addresses questions that were out there, if you make a gift where, it's a gift of that is not completed, meaning the recipient does not have full ability to use that gift. And with a Trump Account, remember, there are restrictions on taking the money out during the growth period. 

So as an example, which is given there, let's say a donor, let's say it's a grandparent and has three grandchildren, Adam, Betty and Charlotte -- Adam, Betty, and Charlotte. And that grandparent contributed $5,000 to each of Trump Accounts for Adam, Betty, and Charlotte. If that's all that the grandparent contributed or if they contributed less than the difference between $5,000 and the annual exclusion amount, which is $19,000, then there's no gift tax responsibility filing requirement, 709 filing gift tax requirement for the grandparent. But remember, it's a safe harbor. So what if the grandparent was generous to Charlotte and gave an additional $13,000 into Charlotte? So Charlotte collectively got $18,000, $5,000 into the Trump Account and then Charlotte got $13,000 that for whatever reason, Adam and Betty, the other two grandchildren, did not get. Well, in that case, the safe harbor would not apply, and the grandparent would have to file a gift tax return for 2026. I'm assuming these gifts were in 2026 to report all 2026 because she exceeded the gift tax exclusion for one of the three grandchildren. And I took that example. I flushed it out with the names of the grandchildren from the Rev. Proc.. So Filomena and I encourage you to look at Rev. Proc. 2026-25 as announced on June 29 because it will provide a lot of relief and provide a lot of clarity, and we hope that's helpful to you. So, Jeff, let me turn it back over to you.

Actually, if I could just turn it just real quick.

Back over to you. Go ahead.

In the documents that we sent out in the PDF file to everybody who's listening, under the resource slide, the very first link actually has the press release that was issued on Monday. So that's IR 2026-80, and embedded in that is the Rev. Proc. And what's really nice about the PDF files that we sent out to you, you could actually click on those hyperlinks, and you will go automatically directly to those pages where we have that information. So I just kind of wanted to throw that out there to everybody.

Yes. A big, big shout out to my colleague, Filomena Mealy, because she did the heavy lifting of basically putting together the slide deck, having it reviewed by counsel, and then ensuring that those on the PDF version that there are active links to the resources we described today. So thank you very much, Filomena. That's very beneficial to our attendees.

Welcome.

Thank you both. So I think, yeah, I think we have time for, for one more question. So this question, in regards to contributions to Trump Accounts, how is the IRS going to monitor excess contributions? And are the penalties similar to excess contributions to IRA accounts? It seems that there would be a challenge -- it seems that that could be a challenge considering there are five types of contributions that can be made to a Trump Account.

Yes. I'll take that one, Jeff. I saw that come in early. I think it came in just as we were opening up the portal for the attendees. And I'm happy to hear that not only the questioner, but many of you are very concerned about compliance of this program as we are at the Internal Revenue Service and the Treasury Department. And that's where that Form 5498-TA comes into play because that is a key tool and it's 5498 itself for IRAs has been a key tool for many years, for us to get data to look to see if there are excess contributions subject to an excess contribution penalty. And we do issue letters each year for IRAs that have received excess contributions if they're not corrected. All of that is discussed in IRS publication 590-A, IRA contributions. But the key form for us monitoring those excess contributions, and we hope there are not many, once the rules are understood, will be that Form 5498-TA, Jeff, which breaks out each of the five types of contributions. I'm sorry, Jeff.

No. Thank you very much. And thank you, Filomena, as well. And audience, that that is all the time we have for questions. Again, thank you both, Richard and Filomena for answering the questions today, and sharing your knowledge and expertise on this topic. Now before we close out the Q&A, Richard, what key points do you want the attendees to remember from today's webinar?

Thank you, Jeff. And thank you for moderating today. So this slide on our shows the key takeaways. Remember, this program as envisioned and enacted by the Congress last year, signed by the President is designed for long-term savings for children and should be thought of that way. Wealth building for children, only one funded Trump Account is allowed per child. We talked about the strict rules that apply during the growth period both for contributions and for investments and for the limitations on distributions. So those are key compliance areas for the IRS, and the Form 5498-TA will help us do that. Timing matters when opening the account and making the elections. I would also encourage you and have you encourage your clients to use their individual IRS online account to open up and manage the Trump Account. And then because this is such an important program and such a new program in the Internal Revenue Code, in addition to the guidance we've issued over the past year or so, more IRS guidance is expected as our implementation continues. And we here at the IRS, particularly in communications and liaisons, stand ready to assist you through our outreach efforts to understand all aspects of Trump Accounts. 

So with that, Jeff, I'll turn it back over to you to wrap up.

Great. Thank you for the key points. And, audience, please watch for announcements on future webinars. To register for any upcoming webinars, please visit irs.gov, keyword search webinars, and select the webinars for tax practitioners or webinars for small businesses. When appropriate, we will offer certificates and CE credit for upcoming webinars. Now we invite you to visit the IRS YouTube page at www.youtube.com/irsvideos for other key video messaging. To access recorded versions of our webinars, click the SL webinar playlist link on the slide handout or contact your local Stakeholder Liaison, or the web conference team to receive the link. Again, continuing education credits or certificates of completion are not offered if you view an archive version of any of our webinars. 

Another big thank you to our presenter for a great webinar and Q&A. And I also want to thank you, our attendees, for attending today's webinar, attending, Understanding Trump Accounts: Working Families Tax Cuts. Now remember, if you attended today's webinar for at least 100 minutes after the official start time and answered at least four polling questions during the live broadcast, you will receive a certificate of completion for two IRS CE credits. Or if you attended for at least 50 minutes after the official start time and answered at least three polling questions during the live broadcast, you'll receive a certificate of completion for one IRS CE credit. The polling question example will count towards the minimum question response requirement. Certificate to completion will be emailed to the registration email address of qualifying participants as a PDF attachment from the email address seen on this slide. Please add this email address to your contacts to ensure that you receive the email with the certificate attached. If you qualify for IRS continuing education credit for this webinar and registered with your valid first name, last name, and PTIN as it appears in your IRS PTIN account, your CE credit will be posted in your IRS PTIN account. If you are eligible for continuing education from the California tax education council, your credit will be posted to your CTEC account as well. If you qualify and have not received your certificate and/or credit by July 10, please email us at cl.sl.web.conference.team@irs.gov, which is the email address shown on this slide. If you're interested in finding out who your local Stakeholder Liaison is, visit irs.gov or send an email to the address shown on this slide, and we'll send you that information. 

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