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OB3...2...1..takeoff and takeaways for 2026 – part 2

The One Big Beautiful Bill Act became law on July 4, 2025, with many of its trickier provisions on transition relief going into effect in 2026. Are you prepared for the tracking, reporting, and compliance challenges you’ll face this year? Now is the time to be sure.

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Webinar highlights

During this webinar, we'll cover:

What your “no tax on overtime/tips” obligations are in 2026 (and why the new Form W-4 is the key);
What new data you should already be collecting and how it will impact your onboarding workflow;
How to prepare yourself and your employees for the launch of Trump Accounts; and
A sneak peek at what your employees need to file for their 2025 personal returns.

Watch part 2 now

Executive summary of OB3...2...1..takeoff and takeaways for 2026 – Part 2

This session explores the next phase of the One Big Beautiful Bill Act (OB3/OBBBA), focusing on entirely new provisions introduced for 2026 – most notably the creation of Trump accounts. Unlike Part 1, which addressed changes to familiar payroll concepts, this session introduces a new savings and payroll-linked framework that impacts employer responsibilities, employee benefits, and workforce strategy.
The discussion emphasizes how employers can prepare operationally, understand reporting requirements, and use these new structures as retention and engagement tools in a competitive healthcare labor market.

Introducing Trump accounts: a new payroll-linked savings vehicle

Trump accounts are a newly created, tax-advantaged savings account designed for minor children with valid Social Security numbers. Accounts must be opened by a parent or guardian and will officially launch in mid‑2026.

Key characteristics:

Post‑tax employee contributions up to $5,000 per year (indexed starting 2028)
Employer contributions up to $2,500 annually, tax‑free to the employee within limits
Funds grow tax‑deferred and are generally taxed upon distribution
Accounts function as a hybrid between retirement savings and employee benefit programs

While the accounts are employee‑initiated, employers may choose to facilitate contributions through payroll and integrate them into broader benefits offerings.

Contribution structure and compliance considerations

Trump accounts introduce layered contribution rules that employers must carefully manage:

Total annual contributions from all sources cannot exceed $5,000
Employer contributions are capped at $2,500 tax‑free per employee (across all dependents)
Excess employer contributions become taxable wages
Employee contributions are not reported on Form W‑2
Employer contributions must be tracked and reported using Box 12, Code TA

These rules require payroll systems to differentiate between contribution types and enforce limits across multiple dependents.

Employer flexibility and benefit plan integration

Employer participation in Trump accounts is optional but can be structured in multiple ways:

Facilitate employee contributions through payroll deductions
Provide matching contributions under a Section 128 plan
Incorporate contributions into an existing cafeteria (Section 125) plan, subject to restrictions

Importantly, cafeteria plan contributions can only be made to dependents’ accounts, not the employee’s own account, to avoid disqualifying the plan.

Government and private funding incentives

Early adoption is encouraged through multiple funding sources:

$1,000 federal pilot contribution for children born between 2025–2028
Private and nonprofit contributions, including early grants for qualifying participants
Additional contributions from family members, nonprofits, and government entities

Certain external contributions do not count toward annual limits, creating additional savings opportunities.

Employee experience and retention opportunities

Trump accounts are positioned as more than a compliance requirement – they offer a strategic opportunity to improve employee satisfaction and retention.

Employers can:

Promote long‑term financial wellness for employees’ families
Enhance perceived employer support without requiring significant direct cost
Integrate accounts with broader tools such as early wage access and employee self‑service
Improve engagement through proactive communication and education

Clear communication is essential to ensure employees understand eligibility, limits, and how to access benefits.

Implementation timeline and operational readiness

Key dates and preparation steps include:

Account enrollment begins prior to mid‑2026 through IRS filing or portal
Employer‑facilitated contributions begin July 2026
Payroll systems must support new tracking, limits, and W‑2 reporting
Employers should confirm readiness with payroll providers in advance

Early system validation and communication planning are critical to avoiding compliance gaps.

Additional OB3 provisions impacting employers in 2026

Beyond Trump accounts, the session highlights several supporting changes:

1099 reporting threshold increase from $600 to $2,000
Expanded dependent care assistance limits
Permanent and expanded tax advantages for student loan repayment benefits
Additional incentives tied to employee benefits, including childcare and paid leave

These updates, while less prominent than Trump accounts, reduce administrative burden and expand employer‑provided benefit opportunities.

From policy to workforce strategy

Part 2 of OB3 represents a shift from modifying payroll mechanics to introducing entirely new benefit structures. Trump accounts, in particular, require employers to balance compliance, system readiness, and communication while also presenting a new avenue for workforce engagement.

Organizations that prepare early, align payroll capabilities, and position these benefits clearly for employees will be best equipped to leverage OB3 as both an operational and strategic advantage.