IRS confirms news about tax-free $1,776 payment to 1.5 million Americans – MassLive.com

Business Published: Feb. 02, 2026, 3:07 p.m. This financial boost is one Americans won’t report on federal tax returns. The Internal Revenue Service and the Department of the Treasury have confirmed that the $1,776 “Warrior Dividend” payments distributed to approximately 1.5 million service members in December 2025 are officially tax-free. The IRS designated the one-time payment as a “qualified military benefit,” a classification that excludes the funds from gross income on federal tax returns. President Donald Trump announced the supplemental payments on Dec. 17, choosing the $1,776 figure to honor the 250th anniversary of the United States, according to CNN. The $2.9 billion initiative was authorized by Congress through the “One, Big, Beautiful Bill” passed earlier that year, according to the IRS. Secretary of War Pete Hegseth stated that the payments are designed to improve the living conditions of military personnel and acknowledge 250 years of national protection, according to the U.S. Department of War. “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,” Hegseth said. “All elements of what we’re doing are to rebuild our military.” Decades after Boston mall
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