U.S. troops to get $1,776 tax-free bonuses by Dec. 20

By Andrew Rice
The Center Square

U.S. troops will get a bonus before Christmas this year that will cost taxpayers about $2.6 billion.

President Donald Trump announced a $1,776 tax-free “Warrior Dividend” bonus on Wednesday night during a national address. More than one million service members will get the bonuses.

Active duty service members and reserve service members with active-duty orders of 31 days or more will receive the bonuses by Dec. 20.

A Pentagon official confirmed to The Center Square that payments for each service member will be made “outside the regular pay cycle” by Dec. 20.

“The checks are already on the way,” Trump said. “Nobody deserves it more than our military, and I say, ‘congratulations’ to everybody.”

Funding for the bonus pay will come from the Basic Allowance for Housing funds, according to a Pentagon official. The “One Big Beautiful Bill Act,” signed in July, appropriated $2.9 billion to the Basic Allowance for Housing funds.

Typically, the Basic Allowance for Housing provides tax-free monthly payments for military members living off-base to cover housing costs. The funds are calculated based on housing market values where an individual lives and their pay grade.

Active duty service members in the pay grades from E-1 to O-6 as well as reserve members on active-duty orders of 31 days or more as of Nov. 30 are eligible for the bonuses.

“This Warrior Dividend serves as yet another example of how the War Department is working to improve the quality of life for our military personnel and their families,” Secretary of War Pete Hegseth said in a video posted to social media on Thursday. “All elements of what we’re doing are to rebuild our military.”

The War Department offers Basic Allowance for Housing to military service members every year. It estimated it will pay one million service members in 2026, for a total of $29.9 billion.

The “Warrior Dividend” payments will total $2.6 billion of the allocated funds in the One Big Beautiful Bill. This will leave $300 million remaining from the $2.9 billion afforded to the fund.

A senior White House official told The Center Square that the Warrior Dividend will compensate eligible service members who do not already receive basic housing allowance funds.

Approximately 1.28 million active duty service members and 174,000 reserve members will receive bonuses.

“To the American warrior,” Hegseth said, “we thank you for your service, and we thank you for your sacrifice, we love you and your families and we wish you a very merry Christmas.”