The Canadian Olympic Committee awards Olympic athletes $20,000 for a gold medal, $15,000 for silver and $10,000 for bronze. The Income Tax Act requires these awards to be reported as taxable income – although the athlete may reduce or eliminate his or her tax liability by deducting the expenses associated with earning the award (i.e. training, travel etc.).
The Income Tax Act considers the following to be tax-exempt in most situations:
▪ gifts and inheritances
▪ lottery winnings
▪ post-secondary award and bursaries received while attending a post-secondary school.
▪ a price that is recognized by the general public and that is awarded for meritorious achievement in the arts, the sciences or service to the public – prizes like the Nobel Peace Prize.
In the United States, Olympic athletes receive approximately the same award amounts as Canadian athletes. The IRS not only taxes the awards but also the value of the metal received.