IRS wants to score its share of Spain’s $50 million World Cup prize
Spain may have lifted the FIFA World Cup trophy, but Washington may be preparing to lift a sizeable share of the winnings.
The newly crowned champions earned a $50 million first-place prize after defeating Argentina in the World Cup final. Because much of the tournament was played in the United States, however, a significant portion of that prize money could be subject to U.S. taxation under longstanding rules governing income earned by foreign athletes performing on American soil. Depending on treaty provisions and other factors, federal withholding can reach 30 percent before additional state taxes are considered.
The World Cup distributed $871 million in prize money, with roughly $655 million tied directly to on-field performance. Every foreign team that earned prize money for matches played in the United States could face some level of federal taxation. Experts also note that athletes, coaches, referees and staff frequently encounter a maze of federal rules, international tax treaties and state “jock taxes” that can further complicate their obligations.
The newly crowned champions earned a $50 million first-place prize after defeating Argentina in the World Cup final. Because much of the tournament was played in the United States, however, a significant portion of that prize money could be subject to U.S. taxation under longstanding rules governing income earned by foreign athletes performing on American soil. Depending on treaty provisions and other factors, federal withholding can reach 30 percent before additional state taxes are considered.
The World Cup distributed $871 million in prize money, with roughly $655 million tied directly to on-field performance. Every foreign team that earned prize money for matches played in the United States could face some level of federal taxation. Experts also note that athletes, coaches, referees and staff frequently encounter a maze of federal rules, international tax treaties and state “jock taxes” that can further complicate their obligations.
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