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Before you set up Trump Accounts in Patriot Payroll
Review these requirements before you add a Trump Account contribution or Trump Account deduction:
Written plan: To offer Trump Account contributions, your company needs a written Trump Account contribution program under IRC Section 128. Talk with your accountant or benefits advisor before you start. Keep this for your records.
If employees will also contribute from their pay: Employees can only make pre-tax Trump Account deductions if your company offers them through a cafeteria plan (also called a Section 125 plan). If you only make employer contributions, you don't need a cafeteria plan.
Patriot does not send Trump Account funds: Patriot Payroll records, taxes, and reports Trump Account contributions and deductions, but Patriot does not send the money to the Trump Account. You must send Trump Account contribution and deduction amounts to the financial institution that holds the Trump Account.
Which Trump Account type should I use?
Patriot Payroll has two Trump Account types. Use the type that matches who is paying into the Trump Account:
Trump Account contribution (employer-paid): Use the Trump Account contribution type for money your company pays into the Trump Account of an employee or an employee's dependent. The Trump Account contribution is paid by the employer and does not reduce the employee's net pay. Most employers offering Trump Accounts only need the Trump Account contribution.
Trump Account deduction (employee-paid): Only use the Trump Account deduction type if your cafeteria plan includes Trump Accounts and an employee chooses to have part of their pay go to their child's Trump Account. The Trump Account deduction is withheld from the employee's paycheck and reduces the employee's net pay. If your company only makes employer contributions, you do not need a Trump Account deduction.
Post-Tax deduction: If an employee wants to contribute to a Trump Account with after-tax dollars outside of your company's Trump Account program or you don't have a company Trump Account Contribution plan, use a Post-Tax deduction instead of the Trump Account deduction type. After-tax Trump Account contributions are not reported on Form W-2.
How to Set Up Employer Trump Account Contributions
Follow these steps if your company pays into employees' or their dependents' Trump Accounts. You do not need a Trump Account deduction or a cafeteria plan to set up employer Trump Account contributions.
Step 1: Add a company-level Trump Account contribution
Go to Settings > Payroll Settings > Deductions & Contributions.
In the Contributions section, click Add Contribution.
Enter a Description, for example, "Trump Account ER." The Description appears on employee pay stubs.
Leave the For Deduction field blank.
In the Type field, select Trump Account. Patriot automatically sets the W-2 Box to 12 and the W-2 Label to TA. Leave W-2 Box 12, Code TA selected so the Trump Account contribution reports correctly on Form W-2.
In the Method field, select how Patriot calculates the Trump Account contribution, for example, Fixed Dollar, and enter the default amount if your company uses one.
Leave Taxability set to Not Taxable. [CONFIRM]
Optional: enter an annual amount in the Limits field if your plan sets a limit lower than $2,500.
If you use Patriot Accounting, select an expense account and a liability account.
Click Save.
Step 2: Assign the Trump Account Contribution to an Employee
After you create the company-level Trump Account contribution, assign the Trump Account contribution to each employee your company contributes for.
Go to Payroll > Employee List and select the employee.
Click Deductions & Contributions.
In the Contributions section, click Add.
Select your Trump Account contribution from the Employer Contribution list.
Enter the employee's contribution amount, or keep the company default.
Click Save.
After the Trump Account contribution has been used in a payroll or assigned to an employee, the Type and Method fields are locked.
How to Set up Employee Trump Account Deductions (cafeteria plans only)
Only follow these steps if your company's cafeteria plan (also called a Section 125 plan) includes Trump Accounts and employees choose to have part of their pay go to their child's Trump Account. If your company only makes employer contributions, skip this section.
Step 1: Add a company-level Trump Account deduction
Go to Settings > Payroll Settings > Deductions & Contributions.
In the Deductions section, click Add Deduction.
Enter a Description, for example, "Trump Accnt." The Description appears on employee pay stubs.
In the Type field, select Trump Account. Patriot automatically sets the W-2 Box to 12 and the W-2 Label to TA. Leave W-2 Box 12, Code TA selected so the Trump Account deduction reports correctly on Form W-2.
In the Method field, select Fixed Dollar or Percent of Gross Pay, and enter the default amount or percentage if your company uses one.
Optional: enter an annual amount in the Limits field to keep the employee under the $2,500 combined limit if your company also makes Trump Account contributions. Patriot will automatically stop Trump deduction at $2500, but the limit will need to be reduced if there is an employer contribution also.
If you use Patriot Accounting, choose a liability account for your accounting integration.
Click Save.
Step 2: Assign the Trump Account deduction to an employee
Go to Payroll > Employee List and select the employee.
Click Deductions & Contributions.
In the Deductions section, click Add.
Select your Trump Account deduction.
Optional: Match employee Trump Account deductions
If your company matches what employees put into Trump Accounts, you can link a Trump Account contribution to the Trump Account deduction. When you add the company-level Trump Account contribution, select your Trump Account deduction in the For Deduction field. A linked Trump Account contribution only calculates on paychecks where the employee's Trump Account deduction is also taken, and you can only assign a linked Trump Account contribution to employees who have the Trump Account deduction. For matching formulas, see Company Contributions – Based On Deductions.
Enter the employee's deduction amount or percentage, or keep the company default.
Click Save.
After the Trump Account deduction has been used in a payroll or assigned to an employee, the Type and Method fields are locked.
New to Patriot? You can also add the Trump Account contribution and Trump Account deduction during the payroll setup wizard. See Set Up Company Deductions and Contributions in the Payroll Wizard.