Treasury and the IRS issued detailed Section 128 regulations in proposed form on August 11, 2026. A Federal Register correction was published August 24. The proposal may change before final regulations are issued.
At a glance: Section 128 permits qualifying employer contributions to a Trump Account for an employee or an employee's dependent. For 2026 and 2027, Section 128 employer contributions are generally limited to $2,500 per employee per year. A compliant employer program also requires a separate written program and applicable nondiscrimination controls.
Section 128 employer requirements at a glance
- A separate written Trump Account contribution program.
- Defined eligibility and contribution rules that can be administered consistently.
- Controls around the $2,500 per-employee Section 128 limit for 2026 and 2027.
- Employee certification and a reasonably designed method to verify the destination Trump Account.
- Identification of payments to trustees as Section 128 contributions.
- Applicable nondiscrimination testing and remediation procedures.
- Reasonable employee notice and prior-year contribution reporting.
- Correction procedures when an amount is later determined not to qualify.
1. The employer needs a separate written program
Section 128 employer contributions must be made pursuant to a Trump Account contribution program. The proposed regulations provide operational detail around the written program, including eligibility, contributions, notices, certifications, reporting, and corrections.
The written program should match what payroll, HR, finance, and providers actually do. A document that says one thing while payroll operates differently creates exactly the implementation gap employers should avoid.
2. The $2,500 limit is an employee-level control
For 2026 and 2027, Section 128 employer contributions are limited to $2,500 per employee per year. When an employer permits contributions for more than one dependent of the same employee, the employer therefore needs a control that aggregates Section 128 amounts at the employee level.
3. Employee certification is only part of account verification
The proposed rules contemplate written or electronic employee certifications containing relevant beneficiary information and representations. Employers need a secure intake, change, and retention process for those records.
Certification alone is not the full control. The employer also needs a reasonably designed method—often involving a trustee, payroll processor, or other provider—to verify that the destination is a Trump Account. Contribution files also need to identify the payment as a Section 128 employer contribution.
4. Nondiscrimination testing cannot be an afterthought
Section 128 applies nondiscrimination requirements addressing contributions or benefits, eligibility, average benefits, and certain owner-concentration concerns. Before launch, an employer should assign an owner for testing, establish a calendar, identify required employee census data, and document how failed testing would be handled.
5. Section 125 salary reduction has a narrow role
Department of Labor guidance states that Treasury informed DOL that Section 128 contributions may be offered through salary reduction under a Section 125 cafeteria plan when the contribution is made to a dependent's Trump Account, but not when the contribution is made to the employee's own Trump Account.
6. Employee notices and annual reporting need owners
The proposed employer program includes employee-notification and statement requirements. Operationally, employers need to decide who creates the notice, which employees receive it, how delivery is evidenced, and how the prior-year contribution amount is produced and reconciled.
Current 2026 Form W-2 instructions provide Box 12 Code TA for Trump Account employer contributions. Employers should make sure year-end payroll reporting agrees to trustee and general-ledger records.
7. Build a correction workflow before the first contribution
Errors are predictable: wrong account identifiers, rejected payments, duplicate beneficiaries, eligibility changes, excesses, and amounts later determined not to qualify. The proposed regulations include procedures for notifying trustees when a payment previously identified as a Section 128 contribution is later determined not to qualify.
The proposed rules include a 21-calendar-day safe-harbor concept for certain trustee correction notices after the employer's determination.
8. DOL's ERISA position
DOL Technical Release 2026-02 concludes that Trump Accounts and Section 128 contribution programs generally will not constitute employee pension benefit plans under ERISA Title I when the conditions described in the guidance are satisfied. The analysis remains fact-specific.
9. Current 2026 rulemaking timeline
Treasury and the IRS released the employer-contribution proposal on August 11, 2026. The Federal Register published a correction on August 24 that fixed the comment-deadline language. Comments and requests to speak, including outlines, are due September 25, 2026. Requests to attend without testifying are due by 5:00 p.m. ET on October 13, 2026. The public hearing is scheduled for October 15, 2026 at 10:00 a.m. ET.
A practical employer implementation sequence
- Make the policy decisions. Define eligible employee classes, contribution formula, timing, beneficiaries, and program objectives.
- Draft and approve the written program. Coordinate tax, legal, benefits, and Section 125 review where applicable.
- Design the payroll and provider workflow. Map employee data, certifications, account verification, funding files, trustee identification, and rejection handling.
- Build the controls. Establish the $2,500 limit control, contribution-cycle reconciliation, exception tracking, and nondiscrimination process.
- Prepare notices, reporting, and corrections. Do not wait for the first error or year-end close to decide how these processes will work.
- Run a documented launch gate. Confirm that the written program and actual operating process agree before releasing the first contribution.
Free Section 128 Employer Readiness Checklist
Identify the policy, payroll, employee-data, trustee, testing, and reporting workstreams your organization needs to resolve before launch.
Need the full implementation system?
The Syntera Trump Account Employer Implementation Kit includes the readiness assessment, implementation roadmap, written-program requirements checklist, payroll and contribution workbook, employee certification and communication package, and supporting implementation controls.
See the $129 Employer Implementation Kit
Frequently asked questions
Can employers contribute to Trump Accounts?
Yes. Section 128 allows qualifying employer contributions to Trump Accounts for employees or their dependents when the employer maintains a compliant Trump Account contribution program.
How much can an employer contribute in 2026?
Section 128 employer contributions are limited to $2,500 per employee per year for 2026 and 2027, subject to the written program and other applicable rules.
Does an employer need a separate written plan?
Yes. Section 128 requires contributions to be made under a separate written Trump Account contribution program. The August 2026 proposed regulations add substantial operational detail.
Are the August 2026 employer rules final?
No. They are proposed regulations. Employers should distinguish statutory requirements from proposed regulatory details and monitor the rulemaking through finalization.
Related Trump Account employer resources
Primary sources
IRS Internal Revenue Bulletin 2026-37: REG-101355-26
IRS: Proposed regulations on employer contributions to Trump Accounts
Federal Register: REG-101355-26 / 91 FR 51611
Federal Register correction C1-2026-16314 (Aug. 24, 2026)
U.S. Department of Labor Technical Release 2026-02
This article is educational implementation guidance, not individualized legal, tax, investment, benefits, or payroll advice. The August 2026 Treasury/IRS regulations discussed above are proposed and may change.