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A new International Olympic Committee $140 million fund will dispense grants of up to $10,000 to eligible athletes. But many U.S. Olympians won’t have to worry about added taxes, thanks to a tax law change that exempts earnings related to the games.
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Yes, we are in the midst of global football’s (or soccer as we call it here in the United States) premier tournament. But another international sport group decided to steal a tiny bit of the Fédération Internationale de Football Association’s (FIFA’s) World Cup spotlight.
The International Olympic Committee (IOC) today announced that it has created a $140 million fund it will use to award grants of up to $10,000 per athlete to participating Olympians.
Around 11,000 participants are expected to compete in 2028 at the Los Angeles-hosted Summer Games can apply for the grants after their events conclude.
But the California competitors won’t be the first to be paid. The IOC said the payments also will go to nearly 2,900 athletes who competed at the 2026 Milan Cortina Winter Games.
The added good news for many U.S. Olympians is that the IOC money should be tax-free, thanks to a federal tax law change in 2016.
Further transition from amateur tradition: The IOC cash commitment is a dramatic change in the global games’ 130-year history. Opponents of paying prize money to Olympic participants have, until now, successfully fought such fiscal efforts.
But IOC President Kirsty Coventry, a five-time Olympian and two-time swimming gold medalist for Zimbabwe, made athletes’ compensation a key policy focus.
“It has been a topic of conversation for many years, and I am extremely proud that we are now able to do this,” said Coventry. At 42, she is the IOC’s youngest president, and most recent former athlete, in the sporting organization’s modern history.
“Athletes want more direct support throughout their Olympic journey and beyond,” added IOC member and former NBA star Pau Gasol, who made the official announcement. “This is a win for all of us.”
Gasol, a three-time Olympic medalist for Spain and athletes’ representative on the 15-member IOC executive board, also pointed out that the payments are “not prize money.”
The grants will be awarded to Olympic applicants only if they meet integrity criteria, such as not testing positive for performance-enhancing drugs.
Rich U.S. athletes will still face tax: The Olympics mirror much of the rest of the world when it comes to money. As the iconic Lady Day’s lyric reminds us, “Them that’s got shall get, them that don’t shall lose.”
Top tier Olympic athletes, notably those from professional leagues who compete in basketball, soccer and ice hockey at the games, already are very wealthy. In addition to their pro six-digit pro salaries, these players also make money from endorsements, personal appearances, and other celebrity events.
Meanwhile, the athletes in less glamorous (and less televised) Olympics sports often struggle to cover their training and associated competition costs.
U.S. lawmakers finally officially recognized this inequality in 2016. That year, the United States Appreciation for Olympians and Paralympians Act became law.
This tax code revision says that Olympians whose adjusted gross income (AGI) is $1 million or less do not have to pay federal tax on official cash prizes related to their Olympic efforts. The Appreciation for Olympians law also exempts the fair market value of any gold, silver or bronze medals that these winning athletes collect.
Their wealthy sports colleagues, however, must pay ordinary tax on all their earnings (including those ancillary sports amounts), as well as any Olympic remuneration, including the value of the medals they are awarded. Again, under the Appreciation for Olympians Act this applies to athletes with AGI of more than $1 million.
Of course, these wealthy star athletes aren’t going to worry about the tax implications of an additional 10 grand grant from the IOC. In fact, they probably won’t bother with applying.
Still, these more financially secure Olympians are eligible for the new grants. “They will decide if they want to apply,” said Gasol, who was a member of the L.A. Lakers NBA team. “We want to engage them.”
Olympics addenda: The tax breaks for athletes under the United States Appreciation for Olympians and Paralympians Act applies only to federal income.
The U.S. athletes still must take into account the tax laws of the states where they live. They should talk with a tax expert if they are applying for an IOC grant. An added $10,000 could make a difference in their state tax bill, so they should make plans for that tax possibility.
Finally, while the federal law exempting competition related income applies to the Olympic and Paralympic athletes, the new IOC grants program is for Olympic athletes only. It will not be available to Paralympians since the International Paralympic Committee (IPC) is a separate organization.
The two organizations do work together, and the IPC receives money from the IOC. So, I wouldn’t be surprised to see some similar payment program, with its associated tax implications, developed for Paralympians.
More sports and taxes: You can get more sports details related to the new IOC grants program in coverage from ESPN, the New York Times’ The Athletic, the United Kingdom newspaper The Guardian, and Front Office Sports.
And if you’re looking for additional sports and taxes information, you might find these items of interest:
- 3 tax takes on the Olympics
- Has the Dodgers’ use of deferred compensation broken baseball?
- Super Bowl LX’s super tax windfall for California is most extreme jock tax example
- $1 billion (and counting) in prediction market revenue is going untaxed, says gaming association
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