IRS confirms $1,776 'Warrior Dividend' tax-free for service members

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The Inside Income Service (IRS) delivered excellent news for America’s troops Friday, confirming that the one-time $1,776 "Warrior Dividend" paid to service members in December 2025 is totally tax-free, permitting troops to maintain each greenback of the bonus.

In a Friday release , the Treasury Division and the IRS stated that "supplemental fundamental allowance for housing funds" made to members of the uniformed services in December 2025 "are to not be included in revenue by those that acquired the funds; they don't seem to be taxable."

The company stated federal tax legislation particularly excludes from gross revenue a "certified navy profit," including that fundamental allowances for housing funds fall beneath that class and subsequently aren't topic to federal revenue taxes.

The affirmation caps off President Donald Trump ’s pre-Christmas announcement that just about 1.5 million U.S. service members would obtain a special "Warrior Dividend" in recognition of their service and to commemorate roughly 250 years because the nation’s founding.

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President Donald Trump and Secretary of Conflict Pete Hegseth hear throughout a Cupboard Assembly within the White Home in Washington, D.C. (Andrew Caballero-Reynolds/AFP through Getty Photos)

"And the checks are already on the way ," Trump stated throughout a Dec. 17, 2025, primetime handle from the White Home, crediting tariffs and not too long ago handed GOP spending and tax laws for funding the funds.

"No person deserves it greater than our navy. And I say congratulations to everyone," he added.

In keeping with the IRS, Congress appropriated $2.9 billion in laws enacted final July to complement the fundamental allowance for housing payable to members of the uniformed companies, with the one-time $1,776 payments funded by that appropriation.

The IRS stated the supplemental funds had been made primarily to active-duty service members in pay grades O-6 and under, together with eligible Reserve Part members as of Nov. 30, 2025, throughout the Military, Air Drive, Navy, Marine Corps and Area Drive.

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President Trump celebrates "reawakening the warrior spirit" throughout the navy throughout remarks, Sept. 30, at Marine Corps Base Quantico. (Jim Watson/Getty Photos)

Pentagon press secretary Kingsley Wilson welcomed the tax remedy in remarks carried by Pentagon News , saying the ruling ensures the cash reaches navy households straight.

"The tax-free Warrior Dividend locations $1,776 straight within the arms of our warfighters and their families ," Wilson stated. "The division is proud to acknowledge their sacrifice."

Throughout his December handle, Trump additionally pointed to what he described as a turnaround for the armed forces beneath his management, citing report enlistment and contrasting it with what he known as traditionally poor recruitment numbers beneath the earlier administration.

Secretary of Conflict Pete Hegseth stated the IRS information factors to 'what we're doing to rebuild our navy.' (Alex Wong/Getty Photos)

"What a distinction a 12 months makes," Trump stated.

Secretary of Conflict Pete Hegseth stated the dividend displays a broader push to enhance high quality of life for navy households.

"This Warrior Dividend serves as yet one more instance of how the Conflict Division is working to enhance the standard of life for our navy personnel and their households," Hegseth stated. "All parts of what we’re doing are to rebuild our navy.