On August 20, 2026, Treasury and the IRS announced in IR-2026-96 proposed regulations describing eligible investments for Trump Accounts, a new type of traditional IRA created under the Working Families Tax Cuts.
The rules are proposed, not final. Treasury and the IRS are requesting public comments by October 20, 2026.
The Proposed Investment Standard
During a Trump Account’s growth period, funds generally could be invested only in a mutual fund or exchange-traded fund that:
- Tracks the S&P 500 or another qualified index made up primarily of equity investments in U.S. companies
- For an index other than the S&P 500, has regulated futures contracts traded on a qualified board or exchange
- Does not track an industry-specific, sector-specific, or ESG index
- Does not use leverage
- Has annual fees and expenses of no more than 0.1% of the fund’s net assets
The proposed regulations provide additional rules for deciding whether an investment qualifies and procedures for trustees to keep account funds in eligible investments.
When the Restriction Would Apply
The growth period begins when the beneficiary’s first Trump Account is established and ends on December 31 of the calendar year in which the beneficiary turns 17. The eligible-investment restriction would no longer apply after that period.
If the beneficiary does not select an eligible investment offered by the trustee, funds would be placed during the growth period in an eligible investment selected by the trustee.
The IRS release says the proposed regulations generally would apply to tax years beginning on or after January 1, 2026.
Opening an Account and the Pilot Contribution
A parent, guardian, or other authorized person may use an IRS Individual Online Account to complete Form 4547, Trump Account Election(s) for a child with a Social Security number. The election must be made before the calendar year in which the child turns 18.
For an eligible U.S. citizen child born from 2025 through 2028, the person making the election may also elect the $1,000 pilot program contribution described by the IRS. Eligibility and account rules should be confirmed from current IRS guidance before taking action.
Why It Matters for Schedule C Filers
Personal or family contributions to a child’s Trump Account are not Schedule C business deductions. Qualifying employer contributions are separate: the IRS says they are generally deductible by the employer and excluded from the employee’s taxable income. A sole proprietor acting as an employer should record any eligible employer contribution under the applicable rules and keep it distinct from personal contributions. Review current IRS guidance before taking action.
Simple-C helps Schedule C filers keep business income and expenses organized — so business bookkeeping stays clear while personal financial decisions are handled separately.
This article provides general information, not tax, legal, or investment advice. The regulations discussed are proposed and may change before becoming final. Confirm current details with the IRS and qualified professionals.