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How Much Will Nobel Prize Winners Be Taking to the Bank?

 by Patricia Lynn Henley   Posted on October 11 2013

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The 2013 Nobel Prize winners are being announced this week, with the Organization for the Prohibition of Chemical Weapons (OPCW) being announced this morning as the winner of the Nobel Peace Prize. Ever wonder just how much they take home after all the formal hoopla is over?

This year there's a cash award of 8 million Swedish kronor (slightly more than $1.2 million) for each Nobel category -- physics, chemistry, physiology or medicine, literature and peace are the traditional areas, plus the Prize in Economics in Memory of Alfred Noble which was added to the line-up in 1969. The economics prize has a slightly different name than the others, but it follows all the same rules and comes with the same $1.2 million payout.

Of course, the vast majority of us will never win a Nobel Prize, but it's interesting to speculate. It may seem a bit like winning a lottery -- just an extremely well-deserved lottery (usually).

All together, the Nobel committee will be distributing $7.2 million on Dec. 10. If there's one winner in a category, like this year's winner for literature, Canadian short story writer Alice Munro, that person takes the entire $1.2 million.

This year the prize for Medicine went to three researchers -- James E. Rothman, chairman of the cell biology department at Yale; Randy W. Schekman, professor of molecular and cell biology at the University of California at Berkeley; and Thomas C. Sudhof, professor of molecular and cellular physiology at Stanford University.

If the committee awards them equal amounts, they'll each take home about $400,000, minus roughly $160,000 in IRS withholding, leaving about $240,000 each. Not as good as $1.2 million, but not a bad haul.

For prize recipients who are residents of the United States, federal and state taxes will be due on the total amount received. Actual taxes will depend on the recipient's total income for the year, but the IRS generally withholds 40% of the prize money, and then refunds what isn't due in taxes.

If the committee decides one of the three deserves more than the others, that one will take home $600,000, less about $240,000 to the IRS, leaving $360,000. The other two will get $300,000 each, sending about $120,000 to the IRS, ending up with $180,000 each.

At the awards ceremony, each honoree will receive a check for the amount awarded to him or her -- just a small piece of paper, nothing gaudy or oversized like Publishers Clearinghouse or lottery winners.

They'll also be given a diploma rendered in highly artistic calligraphy and a hand-crafted gold medal made of 18 carat green gold plated with 24 carat gold.

It's a rare event when a Noble medal goes up for sale. The 1975 medal won by Danish physicist Aage Niels Bohr was auctioned off for $47,755 in 2012. This April, the medal that Francis Crick won in 1962 for his role in a historic DNA discovery was auctioned off by his family for $2.27 million. And this July, William Faulkner's 1949 Nobel Prize for Literature medal and drafts of his acceptance speech went up for auction with a minimum bid of $500,000, but didn't sell, so they remain in the possession of Faulkner's heirs.

The prize money, medals and more are all financed by the estate of Alfred Nobel, a Swedish chemist, engineer, innovator and armaments manufacturer who invented dynamite. When he died Dec. 10, 1896, his will allocated the majority of his fortune (about 31 million Swedish kronor) to fund individuals and organizations that provide "the greatest benefit on mankind."

Over the years, Nobel's money has been invested, and in 2012 the capital was estimated to be worth 3.1 billion kronor, or about $472 million -- enough to continue to fund the international awards for quite some time.

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