Winning an Olympic medal isn’t an easy feat and often is associated with awards in addition to a gold, silver or bronze medal. In fact, in the U.S., the U.S. Olympic Committee awards bonuses of $25,000 for gold medals, $15,000 for silver medals and $10,000 for bronze medals. Meanwhile, the U.S. Wrestling Foundation awards $250,000 for a gold medal, $50,000 to silver medal winners and $25,000 for those wrestlers that win a bronze medal.
And while that is a huge deal for the Olympians — many of which live off of stipends and part-time jobs to realize the dream of becoming a medal winner — the Internal Revenue Service wants a piece of their winnings. That’s according to a report which said that, under IRS rules, those payouts are treated as income and are subject to the same taxes as if you won a big jackpot or prizes on a game show. The tax the medal winners pay depends on the tax bracket they are in.
The fact that Olympians have to pay taxes on their gains has raised the ire of U.S. politicians, including Sen. Chuck Schumer (D-NY), who has dubbed the tax a “victory tax.” Legislation to make the payments free of federal tax rules passed in the U.S. Senate but has hit a wall in the House of Representatives.
“Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal,” said Schumer earlier this month. “Most countries subsidize their athletes; the very least we can do is make sure our athletes don’t get hit with a tax bill for winning. After a successful and hard fought victory, it’s just not right for the U.S. to welcome these athletes home with a tax on that victory. We worked hard to pass a bill that would exempt athletes from these tax penalties in the Senate, and now I’m hopeful that this bill will earn strong bipartisan support in the House and quickly become law.”