The Super Bowl is an annual bonanza for beer companies, snack food manufacturers and retailers, TV sales — and the tax man.
The players of the winning New England Patriots as well as the losing Los Angeles Rams will owe both the I.R.S. as well as the state of Georgia, where Super Bowl LIII was played at Mercedes-Benz Stadium in Atlanta.
Each player on the game-winning Pats will earn a $118,000 bonus, and Rams players get a pretty decent consolation prize with a bonus of half that amount, or $59,000, according to Robert Raiola, director of the sports and entertainment group at PKF O’Connor Davies, an accounting and advisory firm. All players on each team earn the same amount, regardless of position or how much time they spend on the field during the game.
Neither of the two teams in this year’s Super Bowl matchup played in the wild card round, so each player also got $29,000 for winning their respective divisional round, plus another $54,000 for their conference round win.
The top federal marginal tax rate of 37% kicks in at incomes over $510,300 for single filers, or $612,350 for those married and filing jointly. Since the average NFL player makes about $2.1 million a year, it’s reasonable to assume they’d be in that top bracket.
That adds up to a total postseason federal tax bill of $74,370 for players on the winning Patriots on income of $201,000, and $52,540 bill for Rams players based on their postseason income of $142,000.
Players also will have to pay state taxes, both on their bonuses as well as the percentage of their working year they spent playing in that state. For 2019, Georgia has a top tax rate of 5.75%. This is a boost for Georgia’s coffers, Raiola points out, since most players don’t pay income tax as state residents there.
Raiola says the Patriots will spend a total of eight days in Georgia, while the Rams, who are in the same conference as the Atlanta Falcons and will return to play them in the 2019 NFL season, will spend a total of 10 days in Atlanta. That’s about 3% and 4%, respectively, of their working season of roughly 230 days (a schedule that includes days for pre-game practice as well as game days). So, Patriots players will owe Georgia 5.75% of 3% of their entire salary for the year, on top of their winning Super Bowl bonus.
Patriots quarterback Tom Brady, who will earn an estimated $15 million this year, will wind up owing a bit over $26,000 to Georgia, if you count both salary and postseason bonuses.
The time for which players owe taxes for playing in Georgia, though, can be deducted from the income tax they owe their home states. For Patriots players residing in Massachusetts, this will more or less be a wash since the state income tax is 5.05%. For Rams players, though, assuming they live in California — which has a 13.3% income tax rate — they will get a partial credit in California for taxes paid to Georgia.
In addition, although we’d definitely classify this as "one-percenter problems," this marks the second year that players on both teams will be lose the ability to deduct state and local taxes and non-reimbursed expenses like union dues and agent fees from their federal income tax bills, a result of 2017's big overhaul in the Tax Cuts and Jobs Act.
(An earlier version of this story misstated the Massachusetts state income tax rate.)