The IRS confirmed that the one-time supplemental housing payments issued to uniformed service members in December 2025 aren’t subject to federal income tax. In its Jan. 16 announcement, the IRS said the payments are classified as “qualified military benefits,” which are excluded from gross income. Known as the “Warrior Dividend,” the $1,776 payments were funded by a $2.9 billion appropriation under the One Big Beautiful Bill Act, signed into law in July 2025. About 1.45 million eligible active-duty and reserve members of the Army, Navy, Air Force, Marine Corps and Space Force received the payments. If you need any guidance, we’re here to help.
