Employers: What to Know About 530A (Trump) Account Contributions
Businesses that want to contribute to 530A (also known as Trump) accounts of their employees’ children can set up a written plan called a Trump Account Contribution Program (TACP). To be excludable from employee gross income, TACP contributions are limited to $2,500 per employee per year (no matter how many eligible children individual employees have). Also, employer contributions count toward the $5,000 annual limit for each 530A account. Employers must follow nondiscrimination rules. In practice, this means contributions for non-highly compensated employees should equal at least 55% of the average contribution for highly compensated employees. Contact us for additional guidance.