US Olympic Medalists Owe Taxes on Their Medals, Bonuses
Even winning a gold medal doesn’t exempt American Olympians from paying taxes.
For example, Michael Phelps, who won five gold medals and one silver medal during the Rio Olympics, has to pay about $55,000 in taxes, according to USA Today.
Olympic athletes who bring home medals also get paid $25,000 for winning the gold, $15,000 for winning a silver, and $10,000 for winning the bronze by the United States Olympic Committee. The athletes are taxed because the Olympic medals and cash bonuses are considered income—just like winning the Nobel Prize, winning on a game show, winning at a casino, or winning the lottery.
“To be clear, these are the maximum possible tax amounts, and vary widely based on an individual’s tax circumstances and available deductions. Still, the athletes must reckon their medal winnings with the IRS code, a headache they can do without,” according to Americans for Tax Reform.
The amount of taxes on the actual medals isn’t much, according to Yahoo, which estimates the value of the gold medal is around $564 (a solid gold medal would be worth about $22,000). According to the report, the silver medal is worth $305 and a bronze medal is of “little intrinsic value.” However, if they were sold on the open market, they could fetch thousands of dollars, according to USA Today, citing tax expert Blake Christian, partner at Holthouse Carlin & Van Trigt.
In 2012, Florida Sen. Marco Rubio proposed a bill to exempt Olympians from paying the tax. “We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it,” he said at the time, but the bill failed to pass.
In 2016, Sens. John Thune and Chuck Schumer proposed a similar bill. “Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal,” Schumer said in a statement earlier this month. President Barack Obama is also reportedly in favor of a tax exemption.