By Ian Berger, JD
IRA Analyst

A Slott Report article from April 20, 2026, reported that a number of states intended to tax Trump accounts less favorably than they are taxed under the federal tax code, and others were undecided about state tax treatment. Since then, several states have changed their minds and will adopt the federal tax treatment of Trump accounts. In addition, several previously undecided states have decided to do the same thing.

As a reminder, four types of contributions to Trump accounts are permitted:

(1) A one-time $1,000 federal government contribution for children born between 2025 and 2028;

(2) Individual contributions by parents, grandparents, or anyone else on behalf of a child, up to $5,000 for 2026;

(3) Contributions by employers for dependents of employees and employees themselves, up to $2,500 for 2026; and

(4) Contributions by tax-exempt organizations or any government.

For federal income tax purposes, Trump account contributions in categories (1), (3) and (4) are considered pre-tax contributions. So, taxation of those contributions and their earnings can be deferred until distribution. Individual contributions (category (2)) are considered after-tax contributions, so they are taxable in the year made. But taxation of earnings on those contributions is deferred until distribution.

States aren’t necessarily required to adopt federal tax treatment of Trump accounts. If they do not, earnings on all types of contributions will be taxed at the state level annually. This will be confusing to residents because earnings will be taxed one way for federal taxes and another way for state taxes.

Here’s an updated list of how things currently stand:

• Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) don’t have state income tax, so this isn’t an issue if you reside there.
• According to the Tax Foundation, 20 states and the District of Columbia broadly match federal tax law. Those 20 states are: Alabama, Colorado, Connecticut, Delaware, Illinois, Iowa, Kansas, Louisiana, Maryland, Missouri, Montana, Nebraska, New Mexico, New York, North Dakota, Oregon, Rhode Island, Utah, Vermont and West Virginia. Those states will likely tax Trump account contributions like federal law does.

What about the remaining 21 states?

• Ten states (Arizona, Arkansas, Idaho, Indiana, Maine, Minnesota, North Carolina, Ohio, Oklahoma and Virginia) have either said they will conform to federal tax law or have recently passed conformity legislation.
• Three states (California, Hawaii and Kentucky) previously said they wouldn’t follow federal law, but have since changed their minds.
• Four other states (Georgia, Michigan, New Jersey and Mississippi) apparently will follow federal law.
• This leaves four states (Massachusetts, Pennsylvania, South Carolina and Wisconsin) that continue to say they won’t recognize the federal tax treatment of Trump accounts.

Keep in mind that this list is still subject to change. The best way to know for sure how a particular state will tax Trump accounts is to contact the state tax office directly.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.