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The \u201cWarrior Dividend\u201d payments of $1,776 made to military service members in December 2025 definitely won\u2019t be subject to income taxes, the IRS confirmed.<\/p>\n
In a joint statement with the Department of Treasury, the IRS explained that the payments technically supplemented service members\u2019 Basic Allowance for Housing since the money came from $2.9 billion in supplemental BAH funds that Congress approved in the One Big, Beautiful Bill, enacted in July 2025.\u00a0<\/p>\n
The \u201csupplemental 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,\u201d according to the joint statement.<\/p>\n
Read More:\u00a0<\/strong>Pentagon Uses Military Housing Funds for $1,776 \u201cWarrior Dividend\u201d<\/p>\n Because normal BAH payments represent a \u201cqualified military benefit,\u201d they\u00a0aren\u2019t taxable. Therefore, the Warrior Dividend payments aren\u2019t, either, according to the two departments.<\/p>\n President Donald Trump announced in December that 1.45 million service members would receive the $1,776 payments, framing them as a holiday gift tied to the nation’s 250th anniversary. Defense Secretary Pete Hegseth directed the Pentagon to disburse the money as a one-time basic allowance for housing supplement.\u00a0<\/p>\n \u201cThe resulting one-time supplemental payments of $1,776 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 this appropriation,\u201d according to the IRS statement.<\/p>\n The Warrior Dividend also won’t count toward retirement calculations. It’s a stand-alone, one-time payment appearing as a separate line item on Leave and Earnings Statements.<\/p>\n Read More:<\/strong>\u00a0Military Spouses: Here\u2019s What to Remember About Filing State Taxes<\/p>\n “We are sending every soldier $1,776. Think of that. And the checks are already on the way,” Trump said during a prime-time address from the White House in which he announced the payments. “Nobody deserves it more than our military.”<\/p>\n The Military Officers Association of America is hosting a\u00a0webinar titled \u201cWhat\u2019s New for the Upcoming Tax Season\u201d from 3 to 4 p.m. Eastern time Feb 18. Those who can\u2019t attend may register to receive a link to the recording.<\/p>\n Whether you’re trying to balance your budget, understand\u00a0military credit card benefits, build up your credit, select a good life insurance program or are gearing up for a home purchase, Military.com has you covered.\u00a0Subscribe to Military.com and get the latest military benefit updates and tips delivered straight to your inbox.<\/p>\n<\/p><\/div>\nIncome Tax Webinar Set for Feb. 18<\/h2>\n
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