They’re American heroes, but when they get home from Rio, U.S. Olympic medalists will be heavily taxed for their achievements.
Olympic medalists receive a cash bonus from the U.S. Olympic Committee: Gold medalists receive $25,000, silver medalists get $15,000, and bronze winners earn $10,000.
The prize money is subject to state and federal income taxes, similar to lottery winnings, so the more medals won, the higher the bill from the IRS. Athletes like Michael Phelps, who won five gold medals and one silver in the 2016 games, and Simone Biles, who won four gold and one bronze, will be taxed the most.
Americans for Tax Reform calculated the bills for the highest income athletes: $9,900 per gold medal, $5,940 per silver, and $3,960 for bronze.
With endorsement deals putting Phelps in the top tax bracket of 39.6 percent, his bill will be around $55,000.
For good measure, athletes are also taxed on the value of the medals themselves. Gold medals are worth about $600 and silver medals around $300, while bronze medal are only worth about $4, BBC News reported.
Most other countries exempt their athletes from these taxes, and some smaller nations even reward their Olympic medalists with larger, six-figure cash payouts and other incentives.
Swimmer Joseph Schooling, who won Singapore’s first-ever Olympic gold medal, received $746,000 in prize money from Singapore’s National Olympics Council, CNN reported. However, in Singapore, 20 percent of the cash prize medalists earn goes back to the National Sports Association for training and development.
The host country Brazil awards its Olympic gold medalists $250,000, and Taiwan, Indonesia, Malaysia, and Thailand offer their athletes big money as well.
Some countries reward their athletes quite handsomely for a gold medal: https://t.co/fzb3sGL1Dl #Rio2016 #Olympics pic.twitter.com/LFL9GewqSv— CNN (@CNN) August 19, 2016
France, South Korea, Japan, China, and the United States also reward medalists with cash, but on a much smaller scale, and in the U.S., taxes can take a significant piece of those winnings.
American lawmakers have debated the so-called “victory tax” for years.
During the 2012 London games, Florida Senator Marco Rubio introduced The Olympic Tax Elimination Act that would exempt winners from being taxed on their medals and prize money. The bill also received support from President Obama, but never made it to the floor for a vote.
In July, a similar bill sponsored by Republican Senator John Thune and Democratic Senator Chuck Schumer passed a vote in the Senate.
Congressmen Bob Dold (R-IL) and Blake Farenthold (R-TX) have introduced their version of the bill in the House of Representatives. The House Ways and Means Committee will vote on it in September.
“Our Olympian and Paralympic medalists should be worried about breaking world records, not breaking the bank, when they earn a medal," Schumer said. "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."
.@Simone_Biles Congrats! My bill would eliminate the taxes you’ll owe on your winnings when you get home. #taxrelief https://t.co/wc7FJgzN8A— Senator John Thune (@SenJohnThune) August 12, 2016