Treasury and IRS Provide Gift Tax Safe Harbor for Contributions to Trump Accounts

Summary

On June 29, 2026, the Department of the Treasury and the IRS issued Revenue Procedure 2026-25 (IR-2026-80), establishing a gift tax reporting safe harbor for contributions to Trump Accounts created under the Working Families Tax Cuts. Under the safe harbor, qualifying contributions — those within the annual gift tax exclusion amount and meeting specified conditions — do not need to be reported on Form 709 (United States Gift (and Generation-Skipping Transfer) Tax Return). The guidance addresses widespread practitioner questions about the gift tax treatment of these new accounts, which were introduced as part of the 2026 tax reform and allow designated family members to make tax-advantaged contributions for children or grandchildren.

Sources

Our Take

For cross-border families with ties to both the US and Canada, this safe harbor removes a meaningful compliance burden. When parents or grandparents fund a Trump Account for a child residing in Canada, the gift tax treatment under US law is now clearer: contributions up to the annual exclusion amount enjoy a reporting safe harbor. However, cross-border planners must also consider Canadian tax implications — Canada does not have a gift tax, but attribution rules and the deemed-disposition regime for certain trust-like structures could interact unexpectedly with US gift tax reporting. A coordinated cross-border review of family wealth transfers is advisable rather than assuming US safe harbor treatment resolves all reporting risk.

Disclaimer: This article is general information only and does not constitute tax advice; it should not substitute professional tax counsel. Please consult a licensed CPA for advice specific to your situation.