The Internal Revenue Service and the Treasury Department said the so-called “warrior dividend” of $1,776 for members of the military announced by President Trump during a prime-time address last month would not be taxed.
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The money is coming out of the $2.9 billion allocated in last July’s One Big Beautiful Bill Act to supplement the basic allowance for housing payable to members of the uniformed services. Last month, President Trump announced the special bonuses would be sent to 1.45 million members of the military before Christmas.
“In honor of our nation’s founding in 1776, we are sending every soldier $1,776, and the checks are already on the way,” he said in the Dec. 18 speech.
Last week, the Treasury and the IRS confirmed ahead of tax season that the payments would not be subject to taxes. They noted that the one-time supplemental payments of $1,776 were made primarily to active-duty members of the uniformed services in the pay grades of O-6 and below and eligible Reserve Component members as of Nov. 30, 2025, of the Army, Air Force, Navy, Marine Corps and Space Force were funded by the appropriation under the OBBBA.
“Federal tax law specifically excludes from gross income a ‘qualified military benefit,” said the IRS and the Treasury in a news release. “The basic allowance for housing payments are qualified military benefits and, therefore, are not taxable.”
