– Updated: 10:30pm, ET, Dec. 17, 2025.
President Donald Trump addressed the nation on Wednesday night, primarily focusing on his economic agenda, but also announcing a one-time bonus for most active duty and some reserve U.S. military troops.
The White House added that the bonuses, which are already in processing, are being sent to all active-duty enlisted members and officers of the rank O-6 and below. The dividends will also be sent to members of the reserves who are currently on active duty orders for 31 days or more as of Nov. 30, 2025. The rank of O-6 is the equivalent of a full colonel in the Army, Air Force, Marines and Space Force, and equal to a captain in the U.S. Navy or Coast Guard.
The “Warrior Dividend” Trump announced is $1,776 and, according to Trump, will be sent to service members before Christmas. According to some unverified reports, the bonuses could be exempted from federal taxes, but this would likely create difficulties for the upcoming tax year. Additionally, states will likely tax the bonuses, or will need to enact legislation soon if they want to exempt the bonuses from taxes.
Traditionally, the U.S. Congress would address the taxabilty of income, including bonuses to the military. It is unclear if the IRS and Treasury Department will wait on the lawmakers to enact such a provision, or will unilaterally act on the president’s directive.
“1,450,000 military service members will receive a special, we call, warrior dividend before Christmas,” he said. “A warrior dividend, in honor of our nation’s founding in 1776, we are sending every soldier $1,776,” Trump said. “And the checks are already on the way.”
Trump cited revenue from tariffs as the source of the funding for the military bonuses.
CPA Practice Advisor will provide further information on the Warrior Dividends and taxation as it becomes available.
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