– Updated: 1:30pm, ET, Dec. 18, 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 Department of Defense further noted that the funding will come through a special housing allowance fund and the bonuses will not be taxable income.
The White House added that the bonuses, which are already in processing through a housing allowance fund previously approved by Congress, 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 Secretary of Defense Pete Hegseth, the bonuses will be exempt from federal taxes. Many states already have legislation tying various types of military compensation to the same taxability rules as the federal government. In such states, the bonuses will also not be considered taxed income.
“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.”
CPA Practice Advisor will provide further information on the Warrior Dividends and taxation as it becomes available.
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