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EMPLOYMENT TAX TOPICS

Do Baseball Players Pay State Taxes? The Jock Tax and Other Facts

Jo Willetts, EA Director, Tax Resources Published On April 01, 2020

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There’s nothing like the start of baseball season to give grownups a chance to feel like kids again. But for the players? It’s serious business. Another season means staying healthy, negotiating the best possible contract, and keeping on top of their taxes. Yes, taxes. Because if you think throwing a perfect game is difficult, you should see a ballplayer’s tax return.

With baseball season getting underway, sportswriters and bloggers across the country are going to publish millions of words on the prospects of the local team, upcoming rookies, and aging veterans. But knowing how much real fans would do to go inside the clubhouse, we thought we’d take a look at something you never read about – filing taxes when you’re a big-league ballplayer. So this summer, while everyone else is tossing around batting averages from 1957, you can win a few bets with some “inside baseball” stats of your own.

Here are a few things you might not have known about a ballplayer’s taxes:

Getting paid

While a baseball player has an annual or multi-year contract, his salary is actually calculated by each game he plays. This helps in tracking his income by state.

Ten W-2 forms

A baseball player gets a W-2 for every state where he played during the season, showing taxable income and withholding. Just like any other job.

The jock tax

A baseball player pays income taxes not only in the state where he lives but in every state where he plays. But, since he doesn’t pay taxes twice on the same money, he’ll file a non-resident return for all those states and claim a credit from each state, to reduce the amount he owes to the state where he lives. This so-called “jock tax” has been around since the 1960s and, as you might guess, has never been very popular with players.

No credits

If a player lives in one of the nine states without income taxes (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming), they won’t get a credit for taxes paid to another state because there aren’t any income taxes in his home state.

Charitable contributions

If a player auctions any equipment like gloves or jerseys for charity, he can only deduct the actual cost he paid for the item, not the auction price. And while donating money to a charitable organization is deductible, he cannot deduct the value of the time he spends working with that organization.

Memorabilia

Players cannot deduct the cost of signed balls, bats, or pictures because he didn’t buy them. On the other hand, if he gets paid for selling these items, he will have to declare that as income.

Travel expenses

During the season, the team covers travel, lodging, and other expenses. But off-season expenses, like travel to spring training, hotels, uniforms, and other game-related expenses are no longer deductible.

So while great ballplayers make the game look easy, there’s a lot more that goes into being a major leaguer than the average fan realizes. In the end, we all have to pay taxes on the money we make at work. It’s just that some of us are lucky enough to feel like a kid playing the game they love.

Now let’s play ball!

About the Author

Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.

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