Super Bowl Money and Tax Facts You May Not Know

NFL players are well-paid, even the rookies. But the biggest winners this year – the Denver Broncos and the Seattle Seahawks – are playing in the Super Bowl this weekend. But when it comes to the Super Bowl, they say, it’s not about the money.

During the regular season, rookies made a minimum annual salary of $405,000, which works out to $23,823 per in-season week. Then there are the veterans, like Broncos quarterback Peyton Manning. Manning’s annual salary of $15 million works out to $882,352 per in-season week.

Earnings for the Super Bowl are a whole different ballgame. Players on the winning team each get paid $92,000. That’s a nice raise for the rookies, meanwhile, the veterans make much less than usual. Players on the losing team get $46,000 each, which is a major score for the rookies and mere peanuts for the veterans. Again, it’s not about the money. For the winners, it’s about the ring.

Speaking of the ring, what is the value of a Super Bowl ring? Depending on the price of gold, it’s worth about $5,000 in monetary terms, but priceless in bragging rights.

Then there's the Pro Bowl, the NFL all-star game, which is generally played one week before the Super Bowl. (This season’s Pro Bowl was played on January 26.) Players are voted into the Pro Bowl by coaches, teams, and fans who visit the NFL's official website. To play in the Pro Bowl in a particular year, a player has to either be selected in the voting or invited as an alternate. Players who will be in the Super Bowl are not eligible for the Pro Bowl, so this year, players from the Seahawks and Broncos were ineligible. However, if they were voted in, even though they couldn’t play last Sunday, they still get a financial win.

Their salaries for this game are the halfway point between the winners' salaries of $53,000 and the losers' salaries of $26,000, which works out to $39,500. Also, the game’s Offensive MVP (Philadelphia Eagles quarterback Nick Foles) and the Defensive MVP (Kansas City Chiefs linebacker Derrick Johnson) were each given new cars, which, of course, represent taxable income.

One more point about Super Bowl/Pro Bowl salaries: Once again, the winners of the Pro Bowl are each paid $53,000, while the losers of the Super Bowl get only $46,000. Plus, every Pro Bowl player gets a free week of vacation in Hawaii. Yeah, it's not about the money. But the money ain't bad.

Tax Free Income?
It’s not often the IRS lets a dollar go by without squeezing it for taxes. But events like the Super Bowl present a way. You can rent out your personal residence for fourteen days or less and not pay federal tax on the income, according to IRS vacation home rules.

Some ticket-holders reported they are flying into nearby states where they have found accommodations and driving into New Jersey for the game. This is why, for the right home, some sources say you can charge upwards of $35,000 a night to rent your home. Of course, for money like that, it has to have all the amenities. Companies sometimes rent upscale homes for their executives to attend the games with their families or colleagues.

Even if your home is ordinary, you may be able to rent it out for a nice sum – and pocket the income tax-free. In fact, it doesn’t matter if the home is a luxury villa or a mobile home or even a boat, as long as you use it as your personal residence, according to an IRS formula. It’s something to consider if you live in an area where huge tourist events occur.

You won’t get away completely tax-free if you reside in New Jersey. New Jersey will include the rental income in your taxable income. With ads popping up on Craigslist offering New Jersey homes for rent, residents need to pay attention to the State Tax News issued by the New Jersey Division of Taxation. This bulletin reminds taxpayers that net income from rents must be included in gross income.

A Nice Tax Gesture that Fell Flat in Super Bowl 2012
In 2012, the Super Bowl between the New York Giants and the New England Patriots was played in Indianapolis, Indiana. As an outreach to NFL executives and players, then-Governor Mitch Daniels gave them a bonus, which was state tax-free income. The gesture was nice, but considering Indiana’s tax rate is low, around 3 percent that year, it wasn’t a great deal for the NFL executives and players, most of whom were used to much higher tax rates at home. The state, on the other hand, lost a lot by not collecting personal income tax on the players and executives. With this year’s Super Bowl to be played in New Jersey, it’s doubtful Governor Chris Christie will make a similar gesture and give up nearly 9 percent tax on those incomes.

In an article published by the New Jersey Daily-Ledger, Robert Raiola, sports and entertainment senior group manager in the Cranford, New Jersey, office of O’Connor Davies LLP, went into detail about the actual numbers, which he said will be quite “taxing” for someone in Peyton Manning’s salary range.

“All of the players will pay taxes to New Jersey for the eight days they will be there. That total will be divided by the total number of duty days they spend working in 2014 and multiplied by their full-year salaries,” said Raiola. “That's ‘jock tax,’ which is the tax states charge visiting athletes who play, train, or do other game-related work within their borders. For Manning, he will pay taxes on the eight days related to the Super Bowl (and if he stays healthy, two additional days when the Broncos return to play the New York Jets in New Jersey next season). That means he'll have to allocate 4.26 percent of his quarterback salary to New Jersey and pay New Jersey state tax at 8.97 percent on it. Win or lose, that works out to about $57,000 in taxes for his eight-day stay in the Garden State.”

Indiana is now bidding for the 2018 Super Bowl, so whether or not the state gives the NFL a pass on tax, hosting the event will be profitable.

Related article:

With NFL Season Kickoff, Players Look to Cut Tax

You may like these other stories...

The IRS has announced the special per diem rates for 2014-15 that taxpayers can use for substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The new per diem rates...
The issue of international assignees was, for a long time, limited to a small number of companies – meaning only those that operated on an international scale. But in recent years, global expansion has shifted into...
Exclusive: Lois Lerner breaks silenceIn her first press interview since the IRS Tea Party targeting scandal broke 16 months ago, ex-agency official Lois Lerner told Politico that employers won’t hire her, she’s...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.