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The optional rule on sleeping in armor from Xanathar's Guide to Everything (p. 77-78) states

Sleeping in light armor has no adverse effect on the wearer, but sleeping in medium or heavy armor makes it difficult to recover fully during a long rest.

When you finish a long rest during which you slept in medium or heavy armor, you regain only one quarter of your spent Hit Dice (minimum of one die). If you have any levels of exhaustion, the rest doesn’t reduce your exhaustion level.

Given an elf trance isn't "sleeping", does wearing armor negatively impact the effects of the trance?

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    \$\begingroup\$ Welcome to RPG.SE! Take the tour if you haven't already, and check out the help center for more guidance. \$\endgroup\$ – V2Blast Oct 10 at 20:11
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No negative effects

Including the details on the Elven Trance feature here:

Trance: Elves do not need to sleep. Instead, they meditate deeply for 4 hours a day. (The Common word for such meditation is “trance.”) While meditating, you can dream after a fashion; such dreams are actually mental exercises that have become reflexive through years of practice. After resting in this way, you gain the same benefit that a human does from 8 hours of sleep.

As it says, you are not sleeping, but gain the benefit of 8 hours of sleep (a long rest). Since the negative effect of wearing armor applies specifically to sleep, and would not be considered a benefit, it would not apply to an Elf in Trance.

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    \$\begingroup\$ I'm not if that view is RAI. But it is definitely RAW \$\endgroup\$ – Garret Gang Oct 10 at 16:04
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    \$\begingroup\$ May or may not be worthwhile to note that there are no RAW always-on effects from wearing armor while sleeping. Xanathar's is an optional rule, as is the potential CON check in the PHB ability scores chapter. \$\endgroup\$ – NautArch Oct 10 at 18:58
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    \$\begingroup\$ Probably also worth mentioning that this is one of the few ways that trancing actually has some mechanical benefit. \$\endgroup\$ – SeriousBri Oct 11 at 12:36

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