Well, the summer Olympics are almost upon us. The Rio games officially begin on August 5th and our top athletes are hard at work putting in the last of their efforts to train and condition. Team USA is no doubt focused on one thing: WINNING. The athletes probably have not even considered what happens after they win. The U.S. Olympian winners will receive a cash prize of $25,000, $15,000, and $10,000 in addition to their gold, silver, and bronze medals, respectively. This money is considered earned income abroad and is subject to IRS taxation –as high as 39 percent. That could be a tax bill of almost $10,000 for winning a gold medal. Yikes!
Fortunately, there is some good news for our Olympians. The Senate just approved the United States Appreciation for Olympians and Paralympians Bill (Sen 2650) by unanimous consent on July 12th. The measure is now headed to the House for consideration. It is not finalized yet, but there is definitely progress in that direction. The Senate is hoping the bill will move quickly through the House to become law.
If enacted, the value of any medals awarded and/or prize money received from the U.S. Olympic Committee on account of winning would be exempt from income taxation, beginning with the 2016 Olympic Games in Brazil. Senator John Thune commented after the bill was passed saying, “Having this bill signed into law would mean victorious athletes from Team USA won’t have to worry about a new tax burden and instead can focus on the warm welcome and congratulations from a grateful nation.”
Go Team USA!
By Stacy Redmond