How much do Olympic athletes owe Uncle Sam on their winnings? We have the details here.

What are the cash bonuses for medalists?

U.S. Olympians receive cash bonuses with each medal.

For the 2024 games, these bonuses are:

• $37,500 for gold
• $22,500 for silver and
• $15,000 for bronze

The IRS previously viewed Olympic medals and bonuses as they view other prize winnings, like those gained from playing the lottery and casino winnings, meaning that they are taxable. Prize winnings are considered income by the IRS, hence the taxes attached to the cash winnings.

Does the tax still apply?

These bonuses are tax-free for most athletes.

In October 2016, President Obama signed the United States Appreciation for Olympians and Paralympians Act into law, which provides an exception to taxable prizes and awards for the value of the medals awarded, and cash bonuses paid, to U.S. Olympic or Paralympic athletes.

However, high profile athletes who earn at least $1 million per year are still on the hook for the victory tax (think of NBA players playing on the US Olympic basketball team or athletes with large NIL deals).

The effective date of this exemption is for any prizes and awards received after December 31, 2015, so it applies to medals and bonuses paid to 2024 Olympians.

Why was the tax repealed?

The Committee Report that accompanied the United States Appreciation for Olympians and Paralympians report provided the following as the reasons for the change:

The Committee believes that the athletes who represent the United States on the global stage at the Olympic and Paralympic games perform a valuable patriotic service. The athletes do so only after years of personal sacrifice to attain the level of excellence required to compete at the Olympic and Paralympic games.

The Committee also believes that during their years of training and preparation, many athletes representing the United States in the games earn little or no money from participation in their chosen sports and often defer pursuit of careers outside sports. Monetary prizes awarded by the USOC to medalists on the U.S. teams are intended to reward such sacrifices and to provide incentives to other athletes who seek to represent the United States on a global stage.

The Committee believes that providing this exclusion for the receipt of an Olympic or Paralympic medal and other prizes awarded by the USOC generally should be without tax consequences.

While Federal tax law excludes the value of the medals and cash prizes received by U.S. Olympians, state laws may differ depending on the Olympians state of residence.

Any other monetary perks for medalists?

Yes, certain athletic federations pay Olympic medalists. This includes:

• American gold medalists in Track and Field- Medalists receive an additional $50,000 from World Athletics. Those in team events will split the $50,000 prize

Contact Our Tax Team for further guidance or to answer your other tax questions.