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?
Best Answer
No negative effects
Including the details on the Elven Trance feature here:
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.