“You’ve just won the Stanley Cup! What are you going to do next?” For many, the answer is, “pay taxes.”
The Washington Capitals won the Stanley Cup last week, defeating the Las Vegas Golden Knights four games to one. While they may still be celebrating their impressive win, many players won’t be celebrating the taxes they’ll soon owe, according to a recent Bloomberg BNA article. One player in particular, Virginia resident Alex Ovechkin, will owe income tax on his reported $10 million salary (not to mention plenty more in endorsements), at the top bracket rate of 5.7 percent.
The good news? Ovechkin, and many of his teammates, will escape the “jock tax”—income taxes levied by some states on non-resident athletes, calculated based on the number of days an athlete spends “on duty” in a jock tax-administering state. Of the 26 states that have major professional sports teams, only Nevada, Florida, Texas, Washington and the District of Columbia do not impose a jock tax. Since the 2018 Stanley Cup finals were in Nevada and D.C., neither team will owe jock taxes for their performances.
Learn more about pro athletes’ tax obligations here.