New Federal Law Excludes Medals and Prize Money Awarded to Olympic Athletes

Posted on October 17, 2016

On October 7, 2016, President Obama signed into law the United States Appreciation for Olympians and Paralympians Act which excludes the gross income earned by Olympians and Paralympians for medals and prize money awarded to them.

Robert J. Dold, R-IL, the bill’s sponsor, stated that these athletes receive little financial help while making numerous personal sacrifices “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.”

The new law is intended to help athletes that win Olympic and Paralympic medals and awards but do not sign endorsement deals or professional contracts.  The Internal Revenue Code starts out with the proposition that all income from all sources is subject to tax.

In the past, Olympians and Paralympians were required to include medals and prize money as income on their tax returns.  The bill signed into law by President Obama changes all of that.  Although we understand the purpose of the law, we are loath to allow carve-outs to special classes of people, especially when we have to report all of our income on our tax returns.  What do you think?

Do you owe money to the IRS? Are you under audit? Please contact us; we can help.  

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