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President Obama signs bill to eliminate taxes on prizes for winning Olympic medals

Athletes who earn less than $1 million annually will not have to pay taxes on their medal winnings.

Gymnastics - Artistic - Olympics: Day 11 Photo by Alex Livesey/Getty Images

Any United States athlete who wins an Olympic medal receives all of the glory that comes with accomplishing such a feat. They also currently receive a tax bill with it. That will change starting in 2018 after President Barack Obama signed a bill into law that eliminates the “victory tax” on Olympic prizes.

Currently, the U.S. Olympic Committee pays athletes $25,000 for winning a gold medal, $15,000 for a silver and $10,000 for winning a bronze. Those amounts are currently subject to taxes as they’re categorized as income. The new bill, which cleared the House by a vote of 415-1, will change that.

"Most of these athletes will never sign an endorsement deal or a professional contract, which is why it's so important that these athletes will no longer be forced to pay a big tax bill when they achieve their Olympic dreams representing the United States," said Robert Dold, who sponsored the bill.

While the new policy will impact many athletes who win Olympic medals, it won’t apply to everyone. Those who earn at least $1 million annually will still have to pay taxes on their medal cash prizes. That means athletes like Michael Phelps or any members of the U.S. men’s basketball team would still pay taxes on their winnings.

The Associated Press estimates Phelps will pay $55,000 in taxes on the six medals he won during the Rio Olympics.

The change will be made for the 2018 Winter Olympics in Pyeongchang, South Korea.