The Internal Revenue Service (IRS) confirmed on Friday that the $1,776 “Warrior Dividend” President Donald Trump’s administration distributed to nearly 1.5 million U.S. service members in December will not be taxed.
In a Friday press release, the IRS wrote, “The Department of the Treasury and the Internal Revenue Service today confirmed that supplemental basic allowance for housing payments made to members of the uniformed services in December 2025 are not to be included in income by those who received the payments; they are not taxable.”
The IRS noted that the confirmation of the tax-free “Warrior Dividend” comes after the president announced last month that roughly 1,450,000 U.S. military members would receive a $1,776 bonus payment before Christmas.
“Nobody deserves it more than our military,” Trump said at the time. “I say, ‘congratulations’ to everybody.”
According to the Department of War, the $1,776 bonus serves as a way to thank military members for their service to the country and a way to “commemorate the 250 years the U.S. military has been defending the nation.”
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“The tax-free Warrior Dividend places $1,776 directly in the hands of our warfighters and their families,” Pentagon Press Secretary Kingsley Wilson said. “The department is proud to recognize their sacrifice.”
As part of Friday’s announcement, the IRS and the Department of War explained that federal tax laws exclude a “qualified military benefit” from gross income.
“The Warrior Dividend is just such a benefit and is therefore not taxable,” the Department of War said. “Service members will keep all of the dividend to use as they see fit.
Following the president’s announcement last month, Secretary of War Pete Hegseth said the $1,776 “Warrior Dividend” was a result of Trump’s “unwavering commitment to our warriors” and the provisions included in his “One Big Beautiful Bill.”
“This Warrior Dividend serves as yet another example of how the War Department is working to improve the quality of life for our military personnel and their families,” Hegseth stated. “All elements of what we’re doing are to rebuild our military.”
“So to the American warrior, President Trump and I and the entire War Department, we have your back,” Hegseth added. “We thank you for your service, and we thank you for your sacrifice.”