The IRS has issued Revenue Procedure 2026-25, offering welcome relief to individuals who contribute to “Trump accounts,” the new tax-favored savings vehicles for minors created under Section 530A of the Internal Revenue Code by the One, Big, Beautiful Bill Act. The guidance addresses an open question that had created uncertainty for millions of donors: whether contributions to these accounts must be reported on a federal gift tax return.
Trump accounts are a form of traditional IRA established for the benefit of an eligible individual under age 18 at the time of the initial account election. During the “growth period” (before the beneficiary turns 18), the account is subject to significant distribution restrictions, and contributions from individuals are generally capped at $5,000 annually.
Because the beneficiary cannot freely access funds during the growth period, questions arose as to whether contributions should be treated as gifts of a “future interest” in property. Under longstanding gift tax rules, future-interest gifts do not qualify for the annual per-donee gift tax exclusion and must be reported on Form 709, regardless of amount. With nearly six million Trump account elections already on file as of June 2026, treating contributions as future interests could have required several million new gift tax filings annually, a substantial compliance burden for donors and a significant administrative strain on the IRS, given that the agency currently processes only about 300,000 gift tax returns per year.
The Safe Harbor
Rev. Proc. 2026-25 resolves this issue by creating a safe harbor. If a taxpayer meets all of the following conditions for a given calendar year, contributions to Trump accounts will be treated as completed gifts that are not future interests, qualifying for the annual exclusion and relieving the donor of any obligation to file a gift tax return for those contributions:
- The taxpayer is an individual;
- The only taxable gifts made during the year are cash contributions to one or more Trump accounts, made before the beneficiary turns 18;
- Total gifts to each beneficiary (including Trump account contributions) do not exceed the annual exclusion amount ($19,000 for 2026);
- The contributions do not generate gift or GST tax liability after applying the donor’s remaining lifetime exclusion or GST exemption; and
- No gift tax return is otherwise required or filed for that year for any other reason (e.g., portability elections or GST allocations).
If any requirement is not met, the safe harbor does not apply, and the donor must file a gift tax return reporting all gifts for the year, including the Trump account contributions as future-interest gifts.
For the vast majority of donors, this guidance eliminates an unnecessary filing burden. However, clients making larger gifts, multiple Trump account contributions to the same beneficiary, or gifts that otherwise trigger a filing obligation should be advised that the safe harbor may not apply, and careful tracking of cumulative gifts per beneficiary remains essential. For more information about this update, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page.