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2014 NFL Draft Pick Tax Implications

by Bryan Patterson, CPA

The 2014 NFL draft took place over the weekend for the outgoing college football seniors and early entrants, giving many college athletes big pay days. Of course, big pay days means big tax bills. Here are some statistics about the top ten draft picks for the 2014 season.

Jadeveon Clowney, the hard-hitting defensive end from South Carolina, was not only the winner with the overall #1 pick, but he also managed to have the lowest blended income tax rate of 40.5% of any of the top ten draft picks. The winner (or loser) for highest blended tax rate, actually went to Kahlil Mack, who was drafted 5th overall by the Oakland Raiders. His blended tax rate was 46.22% for an estimated tax liability of $2,158,219.

Professional football players are required to pay state income taxes in each state they play in a game. These taxes are prorated base on 1/16th of their annual salary and bonuses. Each team plays half their games at home and the other half at other opponents’ stadiums. Each stadium’s home state income tax rate varies, and some states, including the Houston Texas who took Jadeveon Clowney, do not have a state income tax. In fact, Jadeveon Clowney will only play 5 games out of 16 in states with an income tax!

Here are some estimates on the top-ten draft picks taxes based on estimated contracts:

  • Greg Robinson, the Auburn offensive lineman, will pay the most tax of anyone in the top ten. His estimated 2014 tax liability is $2,349,731
  • Blake Bortles, the #3 overall pick, will have the second lowest blended income tax rate at 40.8%.
  • Kahlil Mack, will pay $350,080 in just state income taxes! Sammy Watkins who went #4 overall to the Buffalo Bills was second at $296,548

In addition to these estimates, each player will pay Medicare tax of 1.45% on their entire contract, Social Security of 6.2% on the first $117,000 ($7,254) plus an additional 0.9% Medicare tax on all wages in excess of $200,000.

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Unfortunately, it is impossible to give comprehensive tax and accounting advice over the internet, no matter how well researched or written. Before relying on any information provided here, contact a tax or accounting professional to discuss your particular situation.