IRS Announces $1,776 ‘Warrior Dividend’ for Troops Is Tax-Free

The Internal Revenue Service and the Pentagon said on Jan. 16 that a “warrior dividend” announced by the Trump administration last month for soldiers won’t be taxed, impacting more than 1 million service members. “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 said in a statement. The IRS cited U.S. tax law provisions that exclude a “qualified military benefit” from taxes, saying that the dividend falls under that provision and adding that the “basic allowance for housing payments are qualified military benefits and, therefore, are not taxable.”...