The payments were distributed to an estimated 1.45 million servicemembers in December and are confirmed to be tax free.
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The “Warrior Dividend” payments of $1,776 made to military service members in December 2025 definitely won’t be subject to income taxes, the IRS confirmed.
The IRS says the December 2025 $1,776 payment was treated as a supplemental housing allowance, not taxable income. That’s consistent with tax rules that exclude military allowances from gross income.
Treasury and the IRS confirmed that special housing-related payments made to service members in December 2025 are not taxable ...
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