The IRS has finalized a W-2 reporting code for Trump Account employer contributions. Box 12, Code TA, appears in the 2026 instructions for Forms W-2 and W-3 — not a draft, the final version.
Now the question is what's most important for a payroll team preparing for January.
The short answer
Employer contributions to a Trump Account — for an employee or an employee's dependent — get reported in Box 12 using Code TA, per the IRS's 2026 General Instructions for Forms W-2 and W-3. The code applies to contributions made under a Section 128 Trump account contribution program, which are capped at $2,500 per employee per year and excluded from the employee's taxable income.
Whether offering these contributions creates ERISA exposure is a separate question, addressed by DOL's Technical Release 2026-02, issued in June 2026. Learn more in The 4 ERISA guardrails on Trump Account contributions.
Trump Accounts are a new type of IRA, created under Section 530A of the tax code when the One Big Beautiful Bill Act became law on July 4, 2025. Every eligible individual — anyone under 18 with a Social Security number — can have one established on their behalf, generally by a parent or guardian.
An account doesn't exist automatically. Someone — generally a parent or guardian — has to elect to open one, using Form 4547, Trump Account Election(s). The federal government also makes a one-time $1,000 contribution to accounts established for U.S. citizen children born from 2025 through 2028. Practically, that means a meaningful share of the workforce may already have accounts set up for new dependents before an employer program is even on the table.
Section 128 of the tax code lets an employer contribute to a Trump Account on behalf of an employee or an employee's dependent. Per DOL's technical release, those contributions:
That cap is worth stating precisely, since it's an easy detail to get wrong: it's per employee, not per dependent. An employee with three kids doesn't unlock three separate allowances — contributions to any combination of that employee's own account and their dependents' accounts share the same $2,500 total.
$2,500
The maximum an employer can contribute per employee, per year, under Section 128 — counted toward the account's $5,000 aggregate annual cap.
Here's the mechanic, traced through: an employer contributes $2,500 to an employee's dependent's Trump Account at some point during the year. That amount doesn't appear in Box 1 — Section 128 contributions are excluded from taxable wages. When the employee's W-2 is issued the following January, the contribution appears in Box 12 with Code TA.
Nothing about that flow is still being worked out. It's the same box, the same code, for every employer making this kind of contribution in 2026. For teams that already track pre-tax exclusions and W-2 box assignments across other benefit types, the reporting logic will look familiar.
The contribution itself has to run through a formal arrangement — what the guidance calls a "section 128(c) Trump account contribution program" — not an ad hoc payroll add-on.
A Section 128 program has its own requirements beyond the ERISA question addressed above. IRS guidance points to Section 129 — the same section governing dependent care assistance programs — as the model.
That means the program needs to satisfy nondiscrimination testing across four areas: contributions, benefits, eligibility, and average benefits provided. It also needs to give employees notice of the benefit and provide statements showing what's been contributed on their behalf.
None of that requires an ERISA-style plan document. It does require a written program, tracked contributions, and testing before the program runs — the same operational lift payroll teams already carry for other Section 129-style benefits.
Most employers thinking through implementation will land on payroll deduction as the mechanism, and that's where a cafeteria plan detail matters.
Per IRS Notice 2025-68, a Section 128 employer contribution can run through salary reduction under a Section 125 cafeteria plan when the contribution goes to the employee's dependent's Trump Account. It can't run that way when the contribution goes to the employee's own account — doing so would create a deferred compensation arrangement under Section 125(d)(2)(A), which cafeteria plans aren't permitted to be.
That distinction affects program design more than it affects the mechanics of running the deduction itself, but it's a detail worth knowing from day one rather than discovering it during testing.
There's also a path that skips Section 128 entirely: employees funding their own Trump Account through payroll deduction, with no employer contribution involved. The DOL confirmed this can rely on the existing IRA payroll deduction safe harbor rather than the newer Section 128 conditions — a separate mechanism from the employer contribution program described above.
Two things are locked in. The W-2 reporting mechanic — Box 12, Code TA — is final, not a draft, as of the 2026 General Instructions for Forms W-2 and W-3. And DOL's position that most Trump Account contribution programs sit outside ERISA is stated plainly in Technical Release 2026-02, issued June 17, 2026.
What isn't locked in yet: Treasury and the IRS have indicated that separate guidance under Section 128 itself is still coming, covering the specifics of nondiscrimination testing mechanics, notice requirements, and program administration in more detail than what's been published so far.
See our latest roundup of federal and state payroll updates for what else changed this quarter.
Box 12, using Code TA. The IRS finalized this code in the 2026 General Instructions for Forms W-2 and W-3, covering employer contributions to a Trump Account of an employee or an employee's dependent made under a Section 128 program.
Per employee. An employee with multiple dependents doesn't get a separate $2,500 allowance for each one — contributions to any combination of that employee's own account and their dependents' accounts share the same annual total.
Both. Section 128 allows employer contributions to either the employee's own Trump Account or the Trump Account of an employee's dependent. The rules differ slightly by which one — notably, salary reduction contributions under a cafeteria plan are only available for a dependent's account.
No. Section 128 employer contributions to a Trump Account, whether for an employee or their dependent, are excluded from the employee's gross income, similar to other pre-tax employer-provided benefits.
Only when the contribution goes to an employee's dependent's Trump Account. Directing a contribution to the employee's own account through salary reduction would create a deferred compensation arrangement, which isn't permitted under a cafeteria plan.
See how Greenshades handles payroll deductions and W-2 reporting for complex employers.
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