The Internal Revenue Service (IRS) delivered good news for America’s troops Friday, confirming that the one-time $1,776 "Warrior Dividend" paid to service members in December 2025 is completely tax-free, allowing troops to keep every dollar of the bonus.

In a Friday release, the Treasury Department and the IRS said that "supplemental basic allowance for housing payments" made to members of the uniformed services in December 2025 "are not to be included in income by those who received the payments; they are not taxable."

The agency said federal tax law specifically excludes from gross income a "qualified military benefit," adding that basic allowances for housing payments fall under that category and therefore are not subject to federal income taxes.

The confirmation caps off President Donald Trump’s pre-Christmas announcement that nearly 1.5 million U.S. service members would receive a special "Warrior Dividend" in recognition of their service and to commemorate roughly 250 years since the nation’s founding.

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"And the checks are already on the way," Trump said during a Dec. 17, 2025, primetime address from the White House, crediting tariffs and recently passed GOP spending and tax legislation for funding the payments. 

"Nobody deserves it more than our military. And I say congratulations to everybody," he added.

According to the IRS, Congress appropriated $2.9 billion in legislation enacted last July to supplement the basic allowance for housing payable to members of the uniformed services, with the one-time $1,776 payments funded by that appropriation.

The IRS said the supplemental payments were made primarily to active-duty service members in pay grades O-6 and below, along with eligible Reserve Component members as of Nov. 30, 2025, across the Army, Air Force, Navy, Marine Corps and Space Force.

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Pentagon press secretary Kingsley Wilson welcomed the tax treatment in remarks carried by Pentagon News, saying the ruling ensures the money reaches military families directly.

"The tax-free Warrior Dividend places $1,776 directly in the hands of our warfighters and their families," Wilson said. "The department is proud to recognize their sacrifice."

During his December address, Trump also pointed to what he described as a turnaround for the armed forces under his leadership, citing record enlistment and contrasting it with what he called historically poor recruitment numbers under the previous administration.

"What a difference a year makes," Trump said.

Secretary of War Pete Hegseth said the dividend reflects a broader push to improve quality of life for military families.

"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. 

The Department of War and the Internal Revenue Service did not immediately respond to Fox News Digital's request for additional comment. 

Fox News Digital's Alec Schemmel contributed to this reporting.

President Donald Trump's former personal lawyer, Michael Cohen, said Friday that prosecutors in both the Manhattan District Attorney’s Office and the New York Attorney General’s Office "pressured and coerced" him into delivering testimony tailored to securing convictions against Trump.

Cohen, who was a key prosecution witness in two New York cases against Trump, accused New York Attorney General Letitia James and Manhattan District Attorney Alvin Bragg of pursuing evidence aimed at Trump, saying prosecutors were uninterested in testimony that didn’t fit their narrative.

"I felt pressured and coerced to only provide information and testimony that would satisfy the government’s desire to build the cases against and secure a judgment and convictions against President Trump," Cohen wrote in a post on Substack.

Fox News Digital has reached out to the Office of the New York State Attorney General and the Manhattan District Attorney's Office for comment.

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Cohen, who was Trump's personal lawyer for many years, said he was writing as a federal appeals court considers the president's request to move his hush money case to federal court for further review.

The former Trump fixer testified in a civil case brought by James' office in 2023, where Trump was found liable for fraudulently inflating his assets to obtain favorable loan terms. He also took the stand in Bragg's case in 2024, where Trump was ultimately found guilty of 34 counts of falsifying business records.

Cohen accused both James and Bragg of using their high-profile cases to elevate their careers, claiming they sought credit as officials who "took down Trump."

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"They blurred the line between justice and politics; and in that blur, the credibility of both suffered," he wrote.

Cohen said that both before and during the trials, prosecutors made it clear they were only interested in testimony from him that would convict Trump.

"When my testimony was insufficient for a point the prosecution sought to make, prosecutors frequently asked inappropriate leading questions to elicit answers that supported their narrative," he said.

Cohen pleaded guilty in 2018 to several crimes, including tax evasion, campaign finance violations and lying to Congress. He described cooperating with authorities while incarcerated, saying he sought sentence relief and felt compelled to provide testimony fitting prosecutors’ narratives with the hope that his sentence would be reduced.

"You may reasonably ask why I am speaking out now. The answer is simple. I have witnessed firsthand the damage done when prosecutors pick their target first and then seek evidence to fit a predetermined narrative," Cohen said, while noting that he was not writing in defense of Trump.