February 1, 2018
Super Bowl winnings provide a lesson on state taxes
The Super Bowl is more than just a big football game. In addition to taking part in a prestigious game, players are also putting in another day at work. With this day at work comes earnings — and with work earnings comes tax obligations.
Super Bowl players and winnings
Payment will vary depending on the outcome of the game. If you win, the earnings are larger than if you lose. How much larger? According to a recent piece in Sports Illustrated, $112,000 for each player on the winning team and $56,000 for the loosing.
Winnings and taxes
There are a couple of different tax implications that will come with these earnings. Like anyone working a job, the worker will have to meet their federal as well as state and local tax obligations.
In an interesting twist, former quarterback for the New England Patriots Jimmy Garoppolo stands to make more money at the Super Bowl than current quarterback Tom Brady.
How? Garoppolo played for the Patriots at the beginning of the season. Based on his contract, this means he qualifies to receive winnings if the team wins the Super Bowl. However, since he will not actually be playing in the Super Bowl, he will not be considered a worker in Minnesota. Based on Minnesota tax law, he would likely not have to pay local taxes. Although he will have other tax obligations, the fact that he would not need to pay the Minnesota state tax may translate to a higher overall payout compared to Tom Brady’s final winnings paycheck.