H.R. 5946, United States Appreciation for Olympians and Paralympians Act

H.R. 5946

United States Appreciation for Olympians and Paralympians Act

Committee
Ways and Means

Date
September 20, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On­­­­ Tuesday, September 20, 2016, the House will consider H.R. 5946, the United States Appreciation for Olympians and Paralympians Act, under suspension of the rules. H.R. 5946 was introduced on September 7, 2016 by Rep. Bob Dold (R-IL) and was referred to the Committee on Ways and Means.

Bill Summary

H.R. 5946 amends the Internal Revenue Code to exclude from gross income, for income tax purposes, the value of any medal or prize money received on account of competition in the Olympic Games or Paralympic Games. The bill will be effective for prizes and awards received after December 31, 2015.

Background

The U.S. Olympic Committee (USOC) awards U.S. Olympic medalists a “victory” bonus of $25,000 for gold, $15,000 for silver, and $10,000 for bronze (each member of a medal-winning team receives a full bonus).[1] In the 2016 Olympic Games in Rio, U.S. athletes won a total of 121 medals—46 gold, 37 silver, and 38 bronze.

These awards are currently considered taxable income under Section 74 of the Internal Revenue Code.. At the top marginal tax rate of 39.6%, Olympic “victory” bonus awards could result in a tax of up to $9,900 for each gold, $5,940 for each silver, and $3,960 for each bronze. For most U.S. Olympic medal winners, who lack substantial outside income, the tax on each medal would likely be considerably lower. In addition, some training and travel expenses may be claimed as tax deductible business expenses.[2]

S. 2650, the United States Appreciation for Olympians and Paralympians Act, passed the Senate by unanimous consent on July 12, 2016. The bill is identical to H.R. 5946, as introduced.

According to the bill sponsor, “Our Olympic and Paralympic athletes make numerous personal sacrifices while training to represent the United States on the global stage. But when they return home with a medal for Team USA, the IRS forces the athletes to pay a penalty for their success. Our bill will prevent the IRS from penalizing Team USA’s champions and ensure that our athletes can remain focused on fulfilling their Olympic dreams without fear of the tax consequences.”[3]

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[1] See CRS Report, “Taxation of U.S. Olympic Medal Winners,” August 18, 2016.
[2] Id.
[3] See Rep. Bob Dold Press Release, “Dold Unveils Bill to Eliminate Tax Penalty on Team USA Medalists,” August 15, 2016.

Cost

A Congressional Budget Office (CBO) cost estimate is currently not available.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.