On Friday, President Obama signed a law removing the “victory tax” for Olympic medalists. Prior to the change, Olympic athletes would receive a cash prize from the U.S. Olympic Committee for their achievement in the international competition. Athletes would receive $25,000 for a gold medal, $15,000 for silver and $10,000 for bronze. Additionally, a $600 value was placed on the gold medal itself, $300 for the actual silver medal and the bronze medal was not valued.
The law now prohibits most U.S. Olympic athletes earning a medal by prohibiting the IRS from taxing the cash awards as well as the value of the medal. However, athletes who earn at least $1 million a year are still subject to the victory tax. Michael Phelps’ tax bill from the Rio Olympics could cost him as much as $55,000 for the five gold and one silver medal he earned.
Rep. Robert Dold, R-Ill., sponsored the bill and said, “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.”
Sarah Robles, bronze medalist in weightlifting at the 2016 Rio Olympics, will be able to take advantage of the new law.