Supplemental Military Housing Payment Is Not Taxable | HelloBooks The one-time $1,776 supplemental basic allowance for housing paid in December 2025 is not taxable. Who received it and how to treat it on the return.
Service members received a one-time housing payment in December 2025, and many will ask whether it is income. IR-2026-09 says it is not.
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One-time payment
$1,776
Applies: Tax year 2025From IRS.gov · checked October 10, 2026
The supplemental payments of $1,776 were made in December 2025 to eligible members of the uniformed services, funded by an appropriation in OBBBA. Federal law excludes qualified military benefits from gross income, and the IRS states that basic allowance for housing payments are in that category, so these payments are not taxable.
Mainly active-duty members in pay grades O-6 and below, plus eligible Reserve Component members as of November 30, 2025, in the Army, Air Force, Navy, Marine Corps and Space Force.
Do not add the payment to wages. If a client’s bank statement shows a December deposit they cannot place, check whether it was this payment before treating it as income. The release does not address how it appears on Form W-2, so compare the W-2 with the client’s leave and earnings statements.
The plain-English summary for business owners
Filing season · refunds
Reference · 2025 and 2026
By client type · families with children
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
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