Question for the Accountants concering Hertl's contract

MikeyMike01

U.S.S. Wang
Jul 13, 2007
14,579
10,683
Hell
Is he counted as a remote worker for San Jose in this case? :sarcasm:

Seriously though, I thought you only need to file taxes for the state you reside in. It would be funny if he has to file California taxes for the games he plays there since he's still being paid by a California company.

Can’t comment on California, but I worked remotely from another state for a business located in New York and I had to file taxes with both states.
 

Tachycineta

Registered User
May 2, 2006
5,633
172
Gaithersburg, MD
I gave up my CPA, but in general (as many have said), your home/resident state (if it has an income tax) taxes all income earned. The nonresident states where you earn money only tax for the portion of income you earn in those states (based on an apportionment formula of % earned in that state/total earned). There are a few methodologies for apportionment (e.g. duty day method- days worked in state x / total days worked)

To alleviate double taxation, on your resident return, you get a credit for taxes paid to other states (though there are some nuances like the credit calculation is based on if the income was earned as a resident so you wouldn't get the full credit if your resident state was a low income state and you earned income in a high income state).


There are also some nuances. I don't know about the jock tax specifically, but many states has reciprocity agreements. For example, MD, DC, VA and PA have reciprocity so if you were a MD resident working in Virginia, as long as your only income was wages, they would be treated as MD income and you wouldn't have to file in VA.

So if you live in MD and work for the Flyers, theoretically, you would still just pay MD income tax for what is earned in PA (though Philly has its own taxes)?

There are so many state/locality specific rules.

Signing bonuses are complex, but you should google "signing bonus planning for Canadian and US professional athletes" for an RBC article that explains things pretty well. The US-Canada treaty comes into play.

International tax is generally similar to resident state taxation. I think both the US and Canada have a "worldwide income" approach where residents are taxed on your worldwide income and then get relief from double taxation via tax treaties/credits for taxes paid to other countries.

This is just some general information. Individual scenarios are specific (obviously).

Tax day is only 37 days away thankfully.
 

Spazkat

Registered User
Feb 19, 2015
4,361
2,277
On a given NHL payday (let’s say players are paid bimonthly) will the check stub itemize all the tax withholdings based on a given NHL schedule in a two week period? So if let’s say the Blues had a 3 game road trip through California during a given pay period, will the check stub reflect the “jock tax rate” withholding for the State of California?
Andrew McCutcheon posted his pay stub a while back to show the taxes - I assume it would look like that

apy stub.jpg
 
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Ford Prefect

Registered User
Mar 2, 2002
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Montreal
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Do NHL teams withhold for tax purposes, or do they pay the player in full, and the player is then required to remit himself? And do they players have to make separate returns for each state they play in?

As a side question, what about the portion that the team/league retains for escrow purposes? Does the player claim his full salary and deduct the escrow amount from taxable income? Or does he only file on the basis of what he gets paid?
 

Hockey Outsider

Registered User
Jan 16, 2005
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Do NHL teams withhold for tax purposes, or do they pay the player in full, and the player is then required to remit himself?
Yes, taxes are withheld by the team. Ultimately the amounts get reconciled when the player files his personal tax return.

And do they players have to make separate returns for each state they play in?
Generally speaking, yes. This can be complicated, especially when a player works in both Canada and the US (as is the case in the NHL). Tax return preparation fees can easily run north of $10K annually.
 
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Space umpire

Registered User
Nov 15, 2018
3,009
2,438
Cocoa Beach, Florida
I get a bonus lump sum and it’s taxed on the state taxes of the company I work for not where I live… unfortunately. It might be different if I never worked in that state.
This was a press topic when Matthews signed the contract before this one.
Wages are paid where earned. Bonuses are paid to the state of legal residence.
While I’m not a hockey player, my semi annual bonus is taxed (not taxed) by Florida the company is based in Arkansas but they don’t tax the bonus.

It was thought AM was paying huge provincial taxes in Ontario but most of the wage was actually bonus and his legal residence is in Arizona.
 
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Mattb124

Registered User
Apr 29, 2011
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I get a bonus lump sum and it’s taxed on the state taxes of the company I work for not where I live… unfortunately. It might be different if I never worked in that state.
Taxed (as in you file a tax return in the state the company is located based on the amount of your bonus) or the witholding rate (which dictates how many dollars are withheld from your bonus for tax purposes) is based on that state?
 

AuraSphere

Registered User
Jun 27, 2012
4,214
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I'm not an accountant, but I think the taxes are based on where he earns it, not where the team paying it is located. this is the so-called "jock tax." I think it started with Michael Jordan for some reason. So, you get taxed for all the home games in the state where you play, and you get taxed for all the away games in the states where you play. Someone will correct me if I'm wrong.
I'm an accountant and this isn't true (by canadian standards I imagine US is same).

Although I'm based out of Canada - it all depends where your residency lies. I.e. did he sell off his property? Is his family moving? There's a lot of consideration that needs to be taken into place when considering residency status. Theres another rule thats more so between countries on number of days someone is living in another state called the sojurning rule

Maybe US accountant can confirm - not sure if this just applies only to country level and not states.


Edit: read

Tachycineta's post - sounds right​

 

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