The Tax Problem You, Me, and Patrick Mahomes Have in Common

There’s something you and I have in common with Patrick Mahomes, Bijan Robinson, Puka Nacua, and Jalen Carter. (If you’re anything like me, it’s certainly not athleticism, fame, or career earning potential.) When NFL players travel for away games this year and owe so-called “jock taxes” to the states in which they play, they’re just complying with a special set of rules for the nonresident income taxes that all of us owe when we earn income out of state.

Many taxpayers are unaware of this, but 22 states legally require nonresidents to file and remit income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. if they spend even a single day in the state. Other states have filing thresholds, based on the number of days spent in the state or the amount earned there.

States use special income allocation rules for athletes and entertainers. Athletes never receive the benefit of filing thresholds, and states use what is called a “duty day” calculation to account for the way athletes and entertainers earn income. If an NFL player is presumed to have 170 duty days spread across the season, and he spends three days in another state to play an away game, then about 1.8 percent of the player’s income (3/170) is taxable in that nonresident state. That’s slightly different than how it usually works for ordinary wage earners, but the concept is the same.

For athletes and ordinary taxpayers alike, your home state is entitled to tax income from all sources (wages, investment income, etc.), wherever it may be earned. Other states can tax you where you work. Your home state provides a credit for taxes paid to other states, but only up to the amount owed in your home state on that income. If the nonresident state applies a higher effective rate than your home state does, your total tax liability increases. If they apply the same rate or a lower effective rate, total tax liability remains the same, though that tax is divided across states.

Under jock taxes, all states use an effective rate method, though for the rest of us, states use a mix of effective rate and state taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. Taxable income differs from—and is less than—gross income.   methods. This distinction matters for ordinary taxpayers.

Under an effective rate method, you calculate what your tax liability would be if you earned all your income in the nonresident state, then multiply this by the fraction of income earned in the nonresident state. Under the state taxable income method, you calculate your nonresident tax liability based on the amount of income actually earned in the state.

Consider the difference under California’s highly progressive graduated-rate income tax. A taxpayer with $100,000 in taxable income will face marginal rates ranging from 1 percent on the first $11,079 to 9.3 percent on income over $72,724. Neglecting deductions and exemptions, if someone earns $100,000 in total taxable income and $10,000 (10 percent) of it is in California, then under the state taxable income approach, their $10,000 would all be taxed at 1 percent, yielding California tax liability of $100. But California uses the effective rate method and instead asks what a taxpayer would pay on all their income, prorating it to California’s share, yielding $574 in California tax liability.

With a new NFL season kicking off, I created a jock tax calculator that allows you to select any player or team and see their 2026 compensation and estimated federal, state, and local tax liability, to their home state and to nonresident taxing jurisdictions, accounting for their own state’s credits for taxes paid to other states. You can view a single player or an entire team’s roster, and also see at a glance what they would have paid if they had played for any other team in the league.

Cowboys quarterback Dak Prescott will pay an estimated $15.1 million in taxes this year, all but about $365,000 of it to the federal government, since Texas does not have an individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source. (The $365,000 is taxes paid to other jurisdictions for away games.) If he played for the Los Angeles Rams, he would owe $5.3 million in state and local income taxes. If he played for any of his division rivals, he would pay a little under $4.4 million with the Giants, $4.0 million with the Commanders, and $2.9 million with the Eagles.

The calculator is intended as an interesting illustration of how nonresident income taxes work, as well as a demonstration of the role and significance of interstate tax competition.

Jock taxes are a nuisance to professional football players, though home state tax liability still dominates their overall tax bill, which is why some players explicitly take state income taxes into account when weighing contract offers. Because signing bonuses are typically only taxable in a player’s state of residence, moreover, many players—especially rookies, who have more flexibility—make an effort to establish domicile in a state without an income tax before signing their contract.

If jock taxes are a nuisance for professional athletes, nonresident income taxes are even more frustrating for ordinary taxpayers. If someone spends a significant amount of time in a nonresident state, it makes sense to owe income tax there. But the time and expense of filing in a state where you spend a day or two is wildly disproportionate to the amount owed.

A highly compensated football player with an away game against the Arizona Cardinals has tax professionals to handle his filing obligations. But if an ordinary taxpayer with $100,000 in taxable income works in Arizona for one day, then, at least by the letter of the law, they must file in the state and remit a grand total of $10.

Most ordinary taxpayers aren’t even aware of their obligation. Compliance is low. Jock taxes on highly paid athletes and entertainers are here to stay, but states could make life easier for the rest of us, at very little cost, by adopting reasonable nonresident filing and withholdingWithholding is the income an employer takes out of an employee’s paycheck and remits to the federal, state, and/or local government. It is calculated based on the amount of income earned, the taxpayer’s filing status, the number of allowances claimed, and any additional amount the employee requests. thresholds for ordinary taxpayers.

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