IRS Confirms Tax-Free Status for Troops’ $1,776 ‘Warrior Dividend’
The IRS has confirmed that the recent $1,776 payment, dubbed the “warrior dividend,” is tax-free for eligible troops. This announcement affects approximately 1.5 million active-duty service members and certain Reserve Component members who received the payment in December.
About the Warrior Dividend
President Donald Trump announced this payment during a speech on December 17, 2022. Initially referred to as part of revenue from tariffs, later reports clarified that the funding source was not from tariffs. The payment is intended as supplemental basic allowance for housing.
- Amount: $1,776
- Eligible Recipients: Active-duty service members in pay grades O-6 and below; Reserve Component members.
- Source of Funding: Not from tariffs, but part of the One Big Beautiful Bill Act enacted in July 2022.
IRS Tax Status Confirmation
The Internal Revenue Service stated that these housing payments qualify as military benefits. Thus, they are excluded from gross income under federal tax laws, maintaining a tax-free status for recipients. Pentagon press secretary Kingsley Wilson noted that this financial support would directly benefit service members and their families.
Tax Filing Information
Tax season is approaching, with the IRS starting to accept returns on January 26, 2023. The deadline for filing federal tax returns is April 15, 2023. Certain extensions are available for service members stationed or deployed overseas.
- Federal W-2 Availability: Active-duty service members can access W-2 forms via DOD’s myPay site.
- Expected Maintenance: System maintenance may interfere with account access on the scheduled day for W-2 availability.
Free Tax Services for Military Personnel
Military families can benefit from free tax preparation resources offered by Military OneSource. This includes access to MilTax software and personalized assistance from tax consultants. Eligible individuals can file their federal return and up to five state returns at no cost.
- Eligibility: Active-duty service members, their families, survivors, and recent veterans (up to 365 days post-separation).
- Additional Support: Some installations provide in-person tax preparation services through legal assistance offices.
The “warrior dividend” signifies important financial support for military families, reflecting ongoing governmental commitment to service members’ welfare. For further details, visit Filmogaz.com.
