Guide

How do employer contributions to a 530A account work?

Last checked October 8, 2026

The limit

$2,500 for 2026 and 2027. After 2027 it rises with inflation, rounded down to a multiple of $100.¹

Because the limit is per employee, a parent with three children still has one $2,500 to spread among them.² Proposed rules would apply the limit to everything a person receives from all of their employers combined.⁴

Whose account it can go to

The employee’s own account or a dependent’s.¹ Under the proposed rules, the account’s owner must still be in the childhood period, which ends on December 31 of the year they turn 17.⁴

It sits inside the $5,000

Employer contributions count toward the child’s yearly limit.³ If an employer puts in $2,500, the family can add up to $2,500 more that year. See the contribution limits.

What the employer needs

A separate written plan for the exclusive benefit of its employees.¹ The proposed rules add that the plan may not offer better terms to highly paid employees than to others.⁴

What the proposed rules would add

These were proposed on August 11, 2026 and are not final.⁴

• An employee could contribute through salary reduction in a cafeteria plan, but only to a dependent’s account, not their own.
• Self-employed people and 2% shareholders of S corporations would not be eligible.
• Anything above the limit, or paid outside a written plan, would be taxable pay.
• The employer would report the amount in box 12 of Form W-2 with code TA.

The tax comes later

Because this money is not taxed going in, it is taxed coming out, along with its growth.⁵ See how withdrawals are taxed.