Key Takeaways
- • The IRS and Treasury Department issued proposed regulations (REG-101355-26) establishing the first comprehensive framework for employer-sponsored Trump Account Contribution Programs (TACPs) under Code section 128, enabling tax-advantaged employer contributions to Trump Accounts.
- • Employers implementing TACPs must navigate structural constraints including a one-account limit per eligible child, new employer notice obligations, and enhanced administrative requirements for permitting pre-tax employee contributions through cafeteria plans.
- • The proposed regulations simultaneously modernize nondiscrimination rules applicable to dependent care assistance programs (DCAPs) under Code section 129, addressing long-standing practitioner questions since enactment of the One Big Beautiful Bill Act (OBBBA).
- • The regulations remain proposed and non-binding; Treasury and the IRS have opened a public comment period through September 25, 2026, with a scheduled public hearing on October 15, 2026, allowing employers, industry groups, recordkeepers, and payroll providers to address administrative challenges and transition issues.
- • Employers evaluating TACP adoption must assess program design, eligibility requirements, contribution methodology, tax treatment, and nondiscrimination compliance before integration into total rewards strategies.
Summary
The Internal Revenue Service and Treasury Department have released proposed regulations governing employer-sponsored Trump Account programs, marking the first authoritative guidance on tax-advantaged contributions to these accounts since the One Big Beautiful Bill Act established the framework. The proposed regulations (REG-101355-26) operate under Code section 128 and provide detailed operational requirements spanning program design, eligibility criteria, contribution mechanics, tax treatment, and nondiscrimination testing—issues that tax practitioners and benefits professionals have debated since legislative enactment.
Trump Account Contribution Programs must meet specific structural requirements to qualify for tax-advantaged status. The regulations clarify that each eligible child may maintain only one Trump Account, a material constraint for program design and administration. Employers establishing TACPs face new compliance obligations including enhanced notice requirements and expanded administrative burdens related to cafeteria plan integration, which permits employees to contribute pre-tax dollars to Trump Accounts alongside employer contributions.
The guidance simultaneously updates nondiscrimination rules for dependent care assistance programs under Code section 129, modernizing compliance methodologies and addressing interpretive questions that have persisted since the OBBBA's passage. This dual regulatory approach suggests Treasury's intent to streamline the broader dependent care and child-related savings infrastructure within the employer-sponsored benefits ecosystem.
The regulations remain in proposed form and are not currently binding. Treasury and the IRS have established a public comment deadline of September 25, 2026, and scheduled a public hearing for October 15, 2026. Stakeholders—including employers, industry groups, recordkeepers, and payroll providers—are expected to submit feedback on administrative implementation challenges, nondiscrimination testing methodologies, and transition timelines before final regulations are issued. Employers considering TACP adoption should monitor the comment period and final guidance release to inform benefits strategy decisions.
Trump Account Contribution Programs must meet specific structural requirements to qualify for tax-advantaged status. The regulations clarify that each eligible child may maintain only one Trump Account, a material constraint for program design and administration. Employers establishing TACPs face new compliance obligations including enhanced notice requirements and expanded administrative burdens related to cafeteria plan integration, which permits employees to contribute pre-tax dollars to Trump Accounts alongside employer contributions.
The guidance simultaneously updates nondiscrimination rules for dependent care assistance programs under Code section 129, modernizing compliance methodologies and addressing interpretive questions that have persisted since the OBBBA's passage. This dual regulatory approach suggests Treasury's intent to streamline the broader dependent care and child-related savings infrastructure within the employer-sponsored benefits ecosystem.
The regulations remain in proposed form and are not currently binding. Treasury and the IRS have established a public comment deadline of September 25, 2026, and scheduled a public hearing for October 15, 2026. Stakeholders—including employers, industry groups, recordkeepers, and payroll providers—are expected to submit feedback on administrative implementation challenges, nondiscrimination testing methodologies, and transition timelines before final regulations are issued. Employers considering TACP adoption should monitor the comment period and final guidance release to inform benefits strategy decisions.
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