TRUMP Accounts and Small Business: Jumpstarting the American Dream

By SBE Council at 4 February, 2026, 4:16 pm

By Karen Kerrigan – 

Most startups and small businesses can’t compete with the compensation and benefits packages offered by big businesses. For example, the cost of health insurance or retirements plans are prohibitive for many small firms. Therefore, entrepreneurs and small business owners are on the hunt for new and creative ways to reward and support their employees. Contributions to TRUMP accounts may very well be an option for many small businesses. Even “small” contributions will be appreciated by employees and can add up to big balances over the lifetime an account.

According to U.S. Treasury Secretary Scott Bessent, 600,000 families have already applied for Trump accounts. Advanced as part of the Working Families Tax Cuts package (One Big Beautiful Bill), a TRUMP Account is a new tax-advantaged investment account for children (technically, a type of individual retirement account). Contributions made by small business owners into the accounts of employees’ children can have an outsized impact, and with relatively modest dollars

You may have seen the list of big businesses, large organizations, and big donors who are providing or matching contributions to TRUMP Accounts. Visa, for example, is reportedly setting up a system for cardholders to direct credit card rewards into Trump Accounts.

Small businesses can also play a big role in helping to fund TRUMP Accounts. After all, most of the nation’s employees work for small to mid-size businesses and this supportive gesture will pay dividends beyond the investment gains or compound interest that employees’ children receive from the accounts.

Key Details:

Federal Contribution: The federal government will make a one-time $1,000 pilot program contribution to the Trump Account of each eligible child for whom an election is made, who is a U.S. citizen and who is born on or after Jan. 1, 2025, through Dec. 31, 2028.

Business Participation: Businesses may contribute to a Trump Account for an employee or an employee’s eligible dependent child.

Annual Cap: The employer can contribute up to $2,500 per employee, per year. This total is a per-employee limit, not per child.

Tax Treatment: These employer contributions are excluded from the employee’s taxable income (i.e., they’re pre-tax from the employee’s perspective) and are generally deductible business expenses for the employer.

Contributions Count Toward the Total Annual Limit: Employer contributions count toward the child’s overall $5,000 annual contribution limit.

Direct Contributions: A small business could deposit funds (up to $2,500) into a Trump Account for a qualifying employee’s child during a calendar year.

Minors Who Work: Employers can contribute to the Trump Accounts of workers who are minors (under the age of 18). Annual limits still apply, and the teen must have earned income to justify contributions.

Salary Reduction Arrangement: Employers may also allow employees to make pre-tax contributions from their salary into their dependent’s Trump Account (such as through a Section 125 cafeteria plan), subject to the same $2,500 aggregate limit.

Timeline: Contributions to Trump Accounts cannot be made before July 4, 2026.

The Council of Economic Advisors (CEA) estimates that, under a scenario of average returns on the U.S. stock market, Trump Account balance for a baby born in 2026 will be:

● $303,800 by age 18 and $1,091,900 by age 28 if maximum contributions are made.

● $5,800 by age 18 and $18,100 by age 28 if no contributions are made

Once a child turns 18, they become the owner of the account, which functions like a traditional IRA: the funds stay tax-advantaged, investment growth continues tax-deferred, and early withdrawals are restricted, just like other retirement accounts.

SBE Council looks forward to providing data and research about Trump Accounts and how small businesses are participating in their growth and success.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council.