‘Trump Account’ Proposed Rules Seen As Mixed Bag

Tax Notes featured Michael Chittenden’s commentary in an article about the proposed regulations for tax-deferred “Trump accounts,” which provides clarity on some aspects, but which lack guidance on other important areas.

“The proposed regulations primarily address administrative questions regarding the operational aspects of Trump accounts,” Michael said. But they “defer guidance on many of the more difficult questions and leaves them unresolved pending further guidance.”

According to Michael, the proposed rules still don’t address the operation of employer contributions under section 128 and how the relevant nondiscrimination requirements will apply.

Many employers already struggle with the nondiscrimination requirements, Michael said, adding that “this can be a thorny issue upon which guidance would be welcome.”

Michael also emphasized the need to address how employers may design a Trump account contribution plan and avoid ERISA plan status, although he acknowledged that such guidance may come from the Department of Labor.