Are Olympic Awards Taxed?

Under IRC Sec 74, gross income includes amounts received as prizes and awards. This includes cash prizes, medals, and non-cash awards. If the prize is not in cash but in goods or services, the fair market value of the goods or services must be included in income.

 Olympic athletes potentially can exclude the value of their medals. Under IRC Section 74(d), the value of any medal awarded in, or any prize money received from, the United States Olympic Committee (now USOPC) on account of competition in the Olympic Games or Paralympic Games is excluded from gross income. However, this exclusion applies only if the athlete’s adjusted gross income (AGI), determined without regard to this exclusion, does not exceed $1,000,000 ($500,000 if married filing separately) for the taxable year.

California athletes rejoice. On October 1, 2025, Governor Newsom signed SB 711, the Conformity Act of 2025. The legislation updates California's tax code to align with the federal Internal Revenue Code (IRC) as of January 1, 2025. Beginning with the 2025 tax year, California conforms to the IRC Sec 74(d) exclusion of the value of any medals or other prizes awarded to Team USA athletes during the Olympic and Paralympic games for those athletes whose adjusted gross income does not exceed $1 million ($500,000 for a married individual filing a separate return).