However, the highest profile athletes, such as Michael Phelps and the whole of the USA Basketball Team, don’t stand to gain from the new law, as the exemption only applies to athletes with adjusted gross income of $1 million or less (or $500,000 for those married filing separate).
Prior to the enactment of the Act, any Olympic prizes were taxed as income. This included the bonuses paid to athletes for medaling in the games, which included $25,000 for gold, $15,000 for silver, and $10,000 for bronze, and the value of the medal, estimated at $600 for gold and $300 for silver. Bronze medals are not considered to hold any value. The new Act was made retroactive to December 31, 2015, to ensure it would apply to the Rio 2016 Olympics.
