What Valley businesses should know about new Trump Account rules

Trump Accounts are a new type of investment account designed to help children start building savings early — and businesses can now help fund them for their employees.

Created under the federal tax law passed last year, the accounts allow money to be invested in certain funds that track the U.S. stock market. Families and others can generally contribute up to $5,000 a year, and eligible children born from 2025 through 2028 can receive a one-time $1,000 contribution from the federal government. Money generally cannot be withdrawn before the year the child turns 18.

Now employers have a role, too.

Businesses can contribute up to $2,500 per employee each year to a Trump Account belonging to the worker or one of the worker’s dependents. If the contribution is made through a qualifying employer program, that money is not counted as taxable income for the employee.