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The IRS says the $1,776 "Warrior Dividend" for service members is tax-free.
The IRS has confirmed that the $1,776 “Warrior Dividend” paid to about 1.45 million U.S. service members in December 2025 is not taxable, meaning recipients do not need to report it on federal tax returns.
The payment, issued as a supplemental housing allowance, qualifies as a tax-exempt military benefit under federal law.
Funded by a $2.9 billion congressional appropriation, it was made to active-duty and Reserve members at pay grades O-6 and below.
The IRS clarified that such benefits are excluded from gross income, ensuring service members keep the full amount.
The payment was announced by President Donald Trump as a tribute to 250 years of military service and was supported by Pentagon officials.
El IRS dice que el "Dividendo del Guerrero" de $1,776 para los miembros del servicio es libre de impuestos.