U.S. Olympians Get Tax Break for Medals and Financial Awards

By Mark Luscombe, CPA, JD, LLM.

U.S. Olympians have won 40 gold medals, 44 silver medals, and 42 bronze medals at the 2024 Olympic Games in Paris, for a total of 126 medals. And that is only half of it. With many events involving teams, relays and other multiple participants, the number of medals presented to U.S. athletes is over twice that number, with around 125 gold medals, 98 silver medals, and 93 bronze medals distributed to individual winning participants.

Many U.S. athletes have received financial assistance to help them devote their time to training for the games from family, friends, sponsors, international or national sports organizations, their national Olympic committee, or even GoFundMe appeals.

Those medals are estimated to be worth around $950 for a gold medal (gold-plated silver; if the medal were pure gold, it would be worth over $40,000), $486 for a silver medal (solid silver), and $13 for a bronze medal (95% copper and 5% zinc). Paris medals will also include a tiny piece of the Eiffel Tower. The US Olympic & Paralympic Committee has most recently paid out $37,500 for a gold medal, $22,500 for a silver medal and $15,000 for a bronze medal. Some international federations for particular sports are also starting to issue financial awards to their Olympic medal winners. Star Olympic athletes are often able to line up endorsement deals worth millions of dollars.

What potential taxes face these Olympians on these medals and funds they receive? Some of the potential issues these U.S. Olympians are likely to face include:

Until 2016, the U.S. taxed Olympic medal winners on the value of the medals won. A law enacted in 2016 excluded the value of Olympic medals from tax for those with incomes of $1 million or less, starting in 2016
The same legislation also excluded payments from the U.S. Olympic and Paralympic Committee (USOPC) from tax, again for those with incomes of $1 million or less
Thanks to endorsement deals for successful athletes and participation by professional athletes, many medal winners will have incomes over $1 million and will still be taxed on those medals and awards
Payments for medals from national or international sport federations will generally be subject to U.S. income tax
Funds from family, friends, sponsors, GoFundMe appeals, etc. may be taxable unless, under the particular facts and circumstances, the funds can be considered a gift, a loan, or a capital contribution for an interest in an entity
Payments for endorsement and sponsorship deals would generally be taxable. It is difficult for funds received from a business to be considered a gift
State taxes. Olympic athletes may be subject to state income taxes even if not subject to federal income taxes
It is not clear whether France will seek to tax medal winners
U.S. residents competing for another country are potentially taxable in the U.S. on their Olympic medals and funds received

Mark Luscombe, CPA, JD, LLM is the principal federal tax analyst for Wolters Kluwer.