Wednesday, August 17, 2016

Taxes On THIS? C'mon! That's Just Outrageous!

New Jersey State Senator Samuel Thompson (R-Burlington, Middlesex, Monmouth, Ocean) announced plans to introduce legislation to exclude the rewards an athlete earns by winning an Olympic Medal from their state income taxes.
The U.S. women’s gymnastics team displaying gold medals won at the 2016 Olympic Games in Rio de Janeiro, Brazil. Laurie Hernandez, center, is from Old Bridge, N.J. (Flickr)

“As the Olympics in Rio de Janeiro draw to a close, New Jersey is preparing to welcome back more than three dozen athletes who have competed for the United States and even a few that have done well enough to earn medals. But there will be more than well-wishers waiting to celebrate their return home,” Senator Thompson said. “They can also expect a hefty tax bill to be waiting for them as well. It’s a shame that these athletes – who have reached the pinnacle of their sports – have to face the burden of paying this tax once they get home.”

Under current law, athletes must pay gross income tax on the value of awards or prizes won in the Olympic Games. The United States Olympic Committee awards $25,000 for gold medals, $15,000 for silver and $10,000 for bronze, according to a report by CNN Money. Those earnings, as well as the value of the medals themselves ($564 for gold, $305 for silver), are taxed at the federal and state level.

The legislation states that “gross income shall not include the value of a prize or award won by the taxpayer in athletic competition in the Olympic Games.” The change applies to medals won on or after Jan. 1, 2012.

A number of New Jersey’s athletes have already won medals in Rio, including gymnast Laurie Hernandez, a native of Old Bridge. Hernandez won gold in the Women’s Team All-Around competition and silver in the Women’s beam.

“These athletes have spent immense amounts of time and money to train with hopes of representing our country at an Olympic level,” Senator Thompson said. “Let’s make sure their Olympic dreams aren’t turned into a monetary nightmare.”

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