Treasury guidance would allow pre-tax payroll contributions to Trump Accounts
WASHINGTON, Aug. 11. The U.S. Department of Treasury issued guidance that could allow parents to make pre-tax contributions to a child's Trump Account directly from their paycheck, the department said. Employers could match those contributions, the guidance states.
Key takeaways
- The U.S. Treasury Department issued guidance that could let parents make pre-tax contributions to a child's Trump Account directly from their paycheck.
- Because the payroll deduction is taken before federal taxes apply, it lowers the worker's taxable income for that pay period.
- Under the guidance, employers could add matching funds alongside a parent's contribution.
- Trump Accounts are savings vehicles designated for children, and the guidance focuses on how they can receive funds through a workplace payroll system.
- The described payroll and employer-match structure resembles employer-sponsored retirement plans, but the accounts are directed toward children rather than the worker's own retirement.
WASHINGTON, Aug. 11. The U.S. Department of Treasury issued guidance that could allow parents to make pre-tax contributions to a child's Trump Account directly from their paycheck, the department said. Employers could match those contributions, the guidance states.
What the guidance establishes
The Treasury Department's release describes a payroll-deduction path through which a parent's contribution would be taken before federal taxes apply. That pre-tax treatment lowers the worker's taxable income for the pay period in which the deduction is recorded. Employers, according to the guidance, could add matching funds alongside a parent's contribution.
Account structure
Trump Accounts are savings vehicles designated for children. Treasury's guidance focuses on how those accounts can receive funds through a workplace payroll system, the department said.
The payroll and employer-match structure Treasury described resembles the funding mechanics of employer-sponsored retirement savings plans. The accounts, however, are directed toward children rather than the worker's own retirement.
Note: The source material did not include contribution limits, income thresholds, matching caps, or an effective date. This article reflects only what the source discloses.