NFL Changes the way it pays players salaries

[ctpatsfan77]

One advantage for the rookies, at least: they save a decent amount in taxes, since getting half the salary in 2022 means less of their 2021 income will be in higher tax brackets.

 

[XLIX]

I am very curious as to how this works regarding players who get suspended, cut or traded in the middle of the season. I would think that most municipalities that tax players for away games would still want the same cut, no matter how the payouts are structured....

 

[jmt57]

How do you know they didn't?

I don't, I was not in the room.

But if the report is accurate - that it was something that the players (not owners) pushed for - then the owners did not have to give anything back in return. Likewise, I have not read anything about what the NFLPA asked for or received in return.

Logically if anybody got anything in return it was the owners, for giving in to a request by the NFLPA - not the other way around.

 

[mgteich]

Is that how it works? If one paycheck representing a week's worth of labor in a high tax state becomes two halved amounts, aren't both paychecks still taxable by that state? Effectively the 2nd paycheck is a deferred payment for labor in that state. I don't think you can avoid taxes simply by deferring payment.

Regards,
Chris

I don't want you as my tax man.

You would accept the idea that football players work for only 17 weeks and are not compensated for other weeks. I would argue that a player is under contract for 52 weeks, with 16 weeks being compensated under the rules for the offseason, training camp and preseason.

I would think that having a compensation schedule tied to 17 games greatly increases the taxes of players who live in low tax states. There are bonuses tied to individual games. Salary is for a season of employment. At least, that is what I would argue in tax court.

 

[ctpatsfan77]

FWIW, the way I understand it, the so-called "jock tax" is based on total NFL pay and the fraction of days of the whole season spent in a given state (e.g., Patriots players pay MA taxes on most of their salary, but if they go to Baltimore for a game they pay Maryland taxes on that day's income).

So an extra week means that the length of the season (including TC, at least) goes from 170ish days to 177ish days, so each day's salary is a bit less. This helps a bit if you live in a low-tax state and play games in higher-tax states, but hurts a bit if the reverse is true.

 

[BTTA]

@ctpatsfan77 @mgteich @fester @Spiral and others, thanks for the thoughtful posts about tax implications and actual costs.

We can rest assured that the NFLPA has some serious finance people working on all this stuff. They aren't going to make a change like this unless it benefits the majority of players, OR it benefits the owners in some way and they got something back for it.

I suppose it could also be as simple as seeing rookies continuously make stupid decisions based on their first paycheck, despite all the counseling they get from the teams, the PA, and their agents. So make those paychecks smaller, and reduce stupid decisions while they get the education in place for longer term financial responsibility. I'd think this would be the least likely explanation, but its possible.

 

[Patsfanin Philly]

Is that how it works? If one paycheck representing a week's worth of labor in a high tax state becomes two halved amounts, aren't both paychecks still taxable by that state? Effectively the 2nd paycheck is a deferred payment for labor in that state. I don't think you can avoid taxes simply by deferring payment.

Regards,
Chris

I was thinking the same thing. their salary is based on 17 games. Wouldn't they still be taxed 1/17 of their total salary if they play a game in a high tax state regardless of getting their salary weekly on over 36 weeks???

 

[mgteich]

I was thinking the same thing. their salary is based on 17 games. Wouldn't they still be taxed 1/17 of their total salary if they play a game in a high tax state regardless of getting their salary weekly on over 36 weeks???

because players earn money for activities that take place on more than the 17 game days

 

[n6249c]

A good number of NFL players only have half a brain

Too many of them end up with half the brain they had to start their career.

 

[n6249c]

Is that how it works? If one paycheck representing a week's worth of labor in a high tax state becomes two halved amounts, aren't both paychecks still taxable by that state? Effectively the 2nd paycheck is a deferred payment for labor in that state. I don't think you can avoid taxes simply by deferring payment.

Regards,
Chris

From the players’ side I’d contend that the labor of being an NFL performer is a 365 day a year endeavor, with practice and conditioning being a daily requirement. So the taxation based on playing a game in some particular jurisdiction should be prorated accordingly. I’m sure those states would argue otherwise, don’t know what case law exists but would expect some talented (read, high priced) lawyers have argued it.

 

[ctpatsfan77]

From the players’ side I’d contend that the labor of being an NFL performer is a 365 day a year endeavor, with practice and conditioning being a daily requirement. So the taxation based on playing a game in some particular jurisdiction should be prorated accordingly. I’m sure those states would argue otherwise, don’t know what case law exists but would expect some talented (read, high priced) lawyers have argued it.

As I noted above, it's not based on games, per se, but on days out of the entire season.

 

[XLIX]

From the players’ side I’d contend that the labor of being an NFL performer is a 365 day a year endeavor, with practice and conditioning being a daily requirement. So the taxation based on playing a game in some particular jurisdiction should be prorated accordingly. I’m sure those states would argue otherwise, don’t know what case law exists but would expect some talented (read, high priced) lawyers have argued it.

My understanding - and I gladly admit I may be wrong - is they look at an athlete's "duty days" which are days of work performed, including things like OTAs and training camp, but do not count independent work outs.

I remember reading an article about Super Bowl 50, which was played in California. Each team spent about a week on location, so each team got taxed for a week of work. But they weren't merely taxed on what they earned for playing in the Super Bowl, they were taxed on roughly 1/26th of their entire salary for the year.

We tend not to feel sorry for millionaire athletes paying high taxes, but let us not forget there are an awful lot of people associated with professional sports who are not making much money. The assistant locker room attendant or assistant equipment managers who travel with the team still have to obey the same laws.

 

[chris_in_sunnyvale]

My understanding - and I gladly admit I may be wrong - is they look at an athlete's "duty days" which are days of work performed, including things like OTAs and training camp, but do not count independent work outs.

I remember reading an article about Super Bowl 50, which was played in California. Each team spent about a week on location, so each team got taxed for a week of work. But they weren't merely taxed on what they earned for playing in the Super Bowl, they were taxed on roughly 1/26th of their entire salary for the year.

We tend not to feel sorry for millionaire athletes paying high taxes, but let us not forget there are an awful lot of people associated with professional sports who are not making much money. The assistant locker room attendant or assistant equipment managers who travel with the team still have to obey the same laws.

How NFL players navigate filing their complex taxes

In 2017 Brock Osweiler was traded from Houston to Cleveland, and then picked up by the Broncos when the Browns cut him after training camp. So where does the quarterback even start when it comes to filing his taxes?

www.si.com

Shows the formula and a lot of interesting effects. Vacations during a bye week to a high tax state? Tax bill. Training camp moved from FL to CA due to hurricane? Tax bill. Low-level assistants who travel with the team? Tax bill.

Regards,
Chris

 

[XLIX]

How NFL players navigate filing their complex taxes

In 2017 Brock Osweiler was traded from Houston to Cleveland, and then picked up by the Broncos when the Browns cut him after training camp. So where does the quarterback even start when it comes to filing his taxes?

www.si.com

Shows the formula and a lot of interesting effects. Vacations during a bye week to a high tax state? Tax bill. Training camp moved from FL to CA due to hurricane? Tax bill. Low-level assistants who travel with the team? Tax bill.

Regards,
Chris

Who was the idiot in here the argued that rich athletes don't pay any taxes?