Olympic medalists in Pyeongchang will no longer be taxed for winning
Winning an Olympic medal is a dream come true, and this year’s winners will have one extra perk their predecessors didn’t— they won’t have to pay the victory tax.
After winning a gold, silver or bronze medal at the Olympics, American athletes are also awarded a cash payment from the United States Olympics Committee (USOC). In the past, this money was taxed as regular income and athletes were expected to pay. In fact, they were even required to pay an additional tax based on the value of the medal. (Gold medals are worth $600, silver is worth $300, and bronze medals weren’t taxed because they are worth less than $5.)
This all ended in 2016, when President Obama signed a bill that prohibited the IRS from taxing medals and prizes given to a U.S. Olympian. The only athletes who aren’t exempt are those making $1 million or more a year. Think snowboarder Shaun White, who reportedly makes $10 million a year through competitions and endorsement deals with companies like Kraft and Red Bull.
Unfortunately, in the world of Olympic athletes, White is the exception rather than the rule.
“Most of these athletes will never sign an endorsement deal or a professional contract, which is why it’s so important that these athletes will no longer be forced to pay a big tax bill when they achieve their Olympic dreams representing the United States,” sponsor Rep. Robert Dold, R-Ill. said at the time.
After the bill was passed in December 2016, it was retroactively applied to medal winners from the 2016 Olympic and Paralympic games in Rio.
The cost of gold
Those athletes who medal at the Olympics are given money through what the USOC calls Operation Gold. Back in Rio, Olympians were awarded $25,000 for a gold medal, $15,000 for silver and 10,000 for bronze. After those games, the USOC upped the payments by 50%, and gold medal winners in Pyeongchang, South Korea will now take home $37,500 for gold, $22,500 for silver, and $15,000 for bronze.
Even though the U.S. has removed the victory tax and increased the cash prize, it still lags far behind other countries in awarding athletes. Singapore pays its athlete the most: gold-medal winners get a cash prize of $753,000. That puts a lot of pressure on speedskater Cheyenne Goh, who will make her debut in South Korea as Singapore’s first winter Olympian.
Other countries that pay big bucks for gold include Indonesia ($383,000), Azerbaijan ($255,000), and Italy ($185,000). In the more moderate range, France pays its gold medalists $66,000 and Russia pays $61,000. Australia shells out the least amount of money, paying their gold medalists just $15,000.
The Winter Olympics in Peyongchang run from Feb. 9- Feb. 25.
Brittany is a reporter at Yahoo Finance. Follow her on Twitter.
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