One may say winning a prize in the Olympics is important, but revenue laws had n’t believe.
The U.S. Olympic and Paralympic Committee will award them cash rewards in Paris as well. Less than$ 1 million in prize money wo n’t be subject to state and local tax authorities as well as French tax collectors, but athletes who earn less than$ 1 million will still be able to collect that money.
The U.S. Appreciation for Olympians and Paralympians Act was passed into law by President Barack Obama in 2016. Olympic and Paralympic sports ‘ stories about how their yearly income is typically modest and their fees are high were met with bipartisan support for the policy. The act exempts USOPC prize money from U.S. taxes for Olympic and Paralympic athletes whose annual income is less than$ 1 million.

In the Paris Olympics, athletes who win a gold medal will receive$ 37, 500, while a silver medal will provide$ 22, 500 and a bronze medal$ 15, 000.
The act wo n’t benefit members of the USA men’s basketball team, as all earn far in excess of$ 1 million a year. As Sportico’s Kurt Badenhausen has noted, Team USA sports will collectively generate just over$ 700 million in salary/endorsements in 2024—so clearly there will be no medal exemptions for those people.
But the act is n’t intended for millionaires.
Its main objective is to increase the value of their prizes by ensuring that the majority of Team USA members do n’t pay taxes on the prize money.
But the income rules scenery is more complicated. Some American athletes may include support agreements that have favorable effects if they win a prize. As they are a result of the player’s monthly earnings and are not subject to the 2016 Act, those bonuses are taxable under both federal and state tax laws.
In contrast, World Athletics, the international governing body for sport, has pledged to honor$ 50, 000 to golden finalists in track and field events, with switch team splitting the money. The act does not specifically mention those funds, which, as stated in the title,” the value of any medal awarded in, or any prize money received from the United States Olympic Committee on account of, competition at the Olympic Games or Paralympic Games.”
At the same time, athletes can use deductions, including for coaching, training, equipment, travel expenses and other costs related to maintaining their athletic success, to offset some of the taxable impact.
Then there’s the French connection.
Under a U. S-France tax treaty, “artistes and sportsmen” —a classification that covers Olympic athletes—are exempt from paying French taxes on up to$ 10, 000 or its equivalent in Euros for services performed while in France. After$ 10, 000, those earnings are taxable. Gold, silver and bronze medals all carry prizes that exceed$ 10, 000, and the amounts exceeding the$ 10, 000 threshold will be subject to French taxes. Those taxes generally range from 11 % to 45 % depending on level of earnings.

Isabelle Vendeville, a French tax attorney who practices at Vendeville Avocats in Paris, told Sportico that U. S. athletes who receive more in compensation than the$ 10, 000 exemption level will need to file a French tax return.
A leading expert on French tax law who has practiced at PricewaterhouseCoopers, Vendeville noted that U. S athletes must “declare all French source income” and will be subject to a” 15 % withholding]that ] is offset against personal income tax due”.
The amount ( 15 % ) is taken over by the French government as withholding tax, which is applied when an athlete files a French tax return. She added the tax level the athletes will ultimately pay could be in the ballpark of 20 % to 30 %, depending, of course, on the amount declared and applicable deductions. Vendeville noted that the withholding tax is much higher—75 % —if the athlete is a resident of a” tax have n” country such as the Bahamas, Seychelles or Belize.
Vendeville does n’t anticipate that American athletes who have lucrative endorsement deals will have to pay taxes on their days ‘ worth of endorsements while they are in France. Pro athletes are subject to so-called” jock taxes” in some U.S. states and cities. The number of days an athlete from the opposing team works in the home team’s city or state is typically considered to be a factor in these taxes. According to how much athletes are actually paid by their teams, so-called “duty days” can cause complex tax issues.
As for French athletes who earn medals, Vendeville says they will be taxed “on the progressive scale of the personal income tax” pursuant to rules “applicable to salaries and wages” and according to, among other factors,” the level of income, situation of the family, etc”.
This article was written by Kurt Badenhausen.