On August 5 we wrote that a business could not yet put $2,500 a year into an employee's Trump account, because the IRS had not written the rule for the "contribution program" the statute requires. Six days later, on August 11, the IRS published a draft of that rule. The August issue was accurate on its date, and the draft answers a question it could not: whether the owner can be in the program. If you are a partner, a sole proprietor, or a 2-percent S corporation shareholder, the answer is no.
The proposal uses the common-law test for "employee" and says the term "does not include a self-employed individual within the meaning of section 401(c)(1), such as a partner in a partnership, a sole proprietor, a director solely by reason of service as a director, or a 2-percent shareholder of an S corporation within the meaning of section 1372(b)." Treasury says it wrote that in answer to a comment asking about owner-employees in partnerships and S corporations. Such an owner "is not disqualified from maintaining a Trump account contribution program covering employees" of the business, "but the self-employed individual would not be eligible to participate in the program." You can offer this to your staff. You cannot take it yourself. The list is the self-employed as section 401(c)(1) defines them; the document says nothing about a C corporation shareholder who works for the company.
The document is REG-101355-26, a notice of proposed rulemaking published in the Federal Register on August 11, 2026. It proposes three new regulation sections under section 128: 1.128-1, titled "Trump account contribution program; definitions," 1.128-2 on the program itself, and 1.128-3 on nondiscrimination.
The numbers did not move. The exclusion is still capped at $2,500 per employee per year, "subject to inflation adjustments after 2027," and that $2,500 still "counts towards the $5,000 annual contribution limit" on the account. An employer's contribution fills half of a ceiling that was already there.
The mechanics follow a dependent care plan, which is the model the statute points to. Under the proposal the program would have to be "set forth in a separate written plan" naming which employees are eligible, how much the employer contributes, and whether an employee may fund a dependent's account through salary reduction under a cafeteria plan, an option the draft does not extend to the employee's own account. Contributions "must not discriminate in favor of" highly compensated employees, and a plan offering the same terms to every eligible employee would pass that first test; an eligibility test and an average benefits test stand behind it. Each employee would get a written statement of the year's contributions, and reporting the amount on the W-2 would satisfy that. Treasury's own estimate is that the written plan would take no more than three hours to prepare.
The part I would not have predicted in August is a single sentence about reliance. Proposed regulations bind no one, and these are "proposed to apply to plan years beginning on or after the date final regulations are published in the Federal Register." Then the document adds: "Taxpayers may rely on these proposed regulations for plan years beginning before the date final regulations are published in the Federal Register." In August the reason to wait was that no rule existed to follow. That reason no longer holds, and what replaces it is a judgment about durability: a final rule can still change the design for later years, and any program set up now is built on a draft that says so.
Nothing in either August document is final. The second, published August 21, proposed section 1.530A-3 on what a child's account may hold "before the first day of the calendar year in which the account beneficiary attains age 18," with comments open to October 20, and four more sections in that block are still to come.
Comments on the employer rule close September 25, 2026. A public hearing is scheduled for October 15, 2026 at 10 a.m. Eastern, and requests to speak are due September 25 as well.
Treasury has now written down the rule and, in the same document, permission to rely on it before it is final. Plan around that sentence, and if you sit in one of the three excluded seats, plan it for your staff.
Sources: REG-101355-26, 91 FR 51611 (Aug. 11, 2026), proposed 26 CFR 1.128-1 through 1.128-3, preamble parts III.A.4 and III.C - https://www.federalregister.gov/documents/2026/08/11/2026-16314/employer-contributions-to-trump-accounts-and-nondiscrimination-rules-for-dependent-care-assistance · Correction, 91 FR 54686 (Aug. 24, 2026) - https://www.federalregister.gov/documents/2026/08/24/C1-2026-16314/employer-contributions-to-trump-accounts-and-nondiscrimination-rules-for-dependent-care-assistance · Guidance on Eligible Investments for Trump Accounts, 91 FR 54280 (Aug. 21, 2026) - https://www.federalregister.gov/documents/2026/08/21/2026-17123/guidance-on-eligible-investments-for-trump-accounts · IRC 128 and 530A as added by Pub. L. 119-21, sec. 70204 - https://www.law.cornell.edu/uscode/text/26/128 · The August 5 issue - https://kfmus.com/kfmblog/your-business-can-put-2500-a-year-into-an-employees-trump-account