Now Reading: US Treasury proposes new Trump Account paycheck rules
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US Treasury proposes new Trump Account paycheck rules
The US Treasury and IRS have proposed rules allowing employers to contribute up to $2,500 tax-free each year to employees’ Trump Accounts for dependent children. Workers can also make pre-tax payroll deductions…
The Story in Brief
The US Treasury and IRS have proposed rules allowing employers to contribute up to $2,500 tax-free each year to employees’ Trump Accounts for dependent children. Workers can also make pre-tax payroll deductions into these accounts. The proposal, open for public comment until an October hearing, follows a $6.25 billion pledge by Dell founder Michael Dell and his wife for the child savings initiative, renamed Invest America accounts. Treasury Secretary Scott Bessent said the guidance helps families grow wealth from day one. Over 50 companies have committed to contributing, and about 7 million children have been enrolled so far.
Eligible children are any US child under 18 with a Social Security number, with a one-time $1,000 Treasury deposit for those born between 2025 and 2028. Other contributions are capped at $5,000 annually per child. A Mercer survey found only 4% of employers expected to offer contributions in 2026-27, while two-thirds decided against it. The Treasury hopes the rules will increase adoption.
The Indian Opinion
The Trump Accounts are being pitched as a wealth-building tool, but the early numbers tell a different story: only 4% of employers plan to join, and two-thirds have said no outright. The $6.25 billion Dell pledge is eye-catching, but the real test will be whether ordinary American families actually see long-term gains or just a tax break for companies. For an Indian reader, it is worth asking: will a similar universal savings scheme work here, or do existing targeted programmes like Sukanya Samriddhi already do more with less?
Source: timesofindia.indiatimes.com
This story was synthesised by AI from the source linked above.
