2016 U.S.–Israel MOU · FY2019–FY2028

How much of your taxes fund Israel?

The 2016 Memorandum of Understanding commits the U.S. to $3.3 billion a year in Foreign Military Financing (FMF) grants to Israel, plus $500 million a year for cooperative missile defense. Enter your W-2 income to see your proportional share.

Example figure shown. Gross wages before tax.

Use line 24 of your Form 1040 for an exact figure. This replaces the estimate.

Your share · Tax year 2026FMF only
Your yearly share of FMF to Israel
$0
Per month $0Per paycheck (biweekly) $0
W-2 wages$0
−Standard deduction$0
=Taxable income$0
Federal income taxEstimated from 2026 brackets$0
×FMF to Israel as a share of federal outlays$3.3B ÷ $7.396T (FY2026)0%
=Your FMF share$0
Total yearly share$0

In FY2027, at least 98.5% of Israel's FMF must be spent on U.S.-made defense goods and services. Of your FMF share, about $0 goes to American suppliers and at most $0 may be spent in Israel.

Where the money is spent

FMF is not a cash transfer. The grant works as a credit Israel draws on to buy defense equipment and services, mostly from U.S. manufacturers through Foreign Military Sales or direct commercial contracts.

Earlier aid agreements let Israel spend part of its FMF inside Israel. This exception is called offshore procurement (OSP). The 2016 MOU phases it out year by year, falling from $815.3 million in FY2019 to zero in FY2028. The MOU also ended Israel's use of FMF to buy fuel and other consumables.

By FY2028, the entire $3.3 billion must be spent on U.S. defense goods and services.

Fiscal yearMay be spent in IsraelMust be spent in U.S.

FY2019, FY2023, FY2024 and FY2025 amounts are as reported. The other years follow the MOU's stated reductions of $10M a year through FY2023 and $200M a year in FY2026 and FY2027.

How it's calculated

  • Federal income tax is estimated from the 2026 IRS brackets and standard deduction for W-2 income with no credits. Payroll taxes (Social Security and Medicare) are left out because they fund their own trust funds, not foreign aid.
  • Your share equals your income tax multiplied by the program's fraction of total federal spending. This is the same proportional method used by tax receipt calculators that split a tax bill across the budget.
  • Federal spending exceeds revenue, so part of every program is financed by borrowing. This method assigns the full cost to taxpayers in proportion to their tax.
  • Only the MOU's baseline amounts are counted. Supplemental appropriations passed outside the MOU, such as the 2024 security supplemental, are not included.

Figures used

FMF per year (MOU)$3.3B
Missile defense per year (MOU)$0.5B
MOU total, FY2019–28$38B
Spendable in Israel, FY2027$50.3M
Federal outlays, FY2026$7.396T
Std. deduction 2026 (S / MFJ / HOH)$16,100 / $32,200 / $24,150

Sources: White House MOU fact sheet (2016), Defense News on the MOU's OSP terms (2017),CBO Monthly Budget Review, Sept. 2026, IRS Rev. Proc. 2025-32 release. This is an estimate for illustration, not tax advice.