News / Article

California Taxes Will Eat Up All Of Cam Newton's Super Bowl Earnings

Source: forbes.com - Feb 3, 2016

Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? Manning has nothing on the state taxes facing Carolina Panthers quarterback Cam Newton for Super Bowl 50 in Santa Clara, Calif. Newton is looking at a tax bill more than twice as much, which will swallow up his entire Super Bowl paycheck, win or lose, thanks to California’s tops-in-the-nation tax rate of 13.3%.

Before we get into the numbers, let’s do a quick review of the jock tax rules applied to professional athletes (similar tax rules apply to anyone doing business across state lines, but they are rarely enforced). States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year. That ratio is then multiplied by the player’s salary to arrive at a state’s allocable income.

TO READ ENTIRE ARTICLE, CLICK ON SOURCE LINK ABOVE

Category: IRS