Quinn Hughes has Wild Tax Savings Opportunity in Minnesota

On December 12^th, 2025, Quinn Hughes was traded from the Vancouver Canucks to the Minnesota Wild in a blockbuster trade that shocked the hockey world. The Norris Trophy winning Hughes was born in Florida, grew up in Michigan, and attended the University of Michigan before being drafted by the Canucks. As a high profile, prolific athlete, his tax situation will be scrutinized. Hughes' background on paper provides the opportunity for him to have established himself as either a Florida or more likely as a Michigan tax resident.

On the surface, one would think the income tax free Florida would have been an obvious choice for residency while he was playing for the Canucks. Now with the trade, and the fact that Minnesota has one of the highest income tax rates among all US states, his residency comes under scrutiny again. With Minnesota now in play, Hughes appears to have three potential options to choose from with Florida still seeming as the most appealing option. After all, residing in a state with no income taxes must be most beneficial, right? To know whether this is correct, an understanding of how athletes are taxed and state tax law, particularly that of Michigan is required. An examination will reveal a wild savings opportunity that Hughes is uniquely positioned to take advantage of.

Tax Residency

Although the definition of state resident may vary amongst the states, there are generally two criteria which will cause residency: physical presence and domicile. Residency through physical presence tends to mean that you are in that state or city more often than you’re not, using 183 days as the determining factor. Since athletes may exceed 183 days in the state or city in which they play – this may cause them to become a resident of that jurisdiction by default. Domicile on the other hand, is where you maintain a permanent residence and when you are away (no matter how long) you intend to return. In other words, domicile is your “home”. Once domicile is established it remains intact until it is either relinquished or another domicile is established elsewhere. For further reading on residency and domicile, we have previously written on this topic - https://www.afptax.com/post/what-does-domicile-have-to-do-with-it

Athletes, just like every other US taxpayer, pay tax on the entirety of their income in their state of domicile. This means Quinn Hughes as a Michigan resident would pay a flat 4.25% tax on all his income but as a Florida resident would pay 0%. If he were to become a resident of Minnesota, he would be faced with a top marginal tax rate of 9.85% with an additional 1% imposed on any capital gains.

While Hughes was playing in Canada, he likely maintained domicile in the United States under the Canada-United States’ tax treaty, Article IV. Therefore, he would have filed as a non-resident in Canada and a resident in the United States and in the state where he maintains domicile.

Taxation of Athletes

As a professional athlete, Hughes is not only subject to tax in his state of residence but also in each state he performs services in based on a ‘duty day allocation.’ A ‘duty day’ is defined as a day the player practices or plays as required by their contract, including preseason training and postseason games. To determine the salary earned in each state (which also applies to Canadian earnings), we use the following formula:

       Player’s Salary × (Duty Days in State ÷ Total Duty Days)

Because most days would be spent performing services where the team is located, he would still be paying tax on most of his income in Minnesota (and previously British Columbia/Canada), regardless of whether Hughes were to file as a Florida or Michigan resident.

In each season, depending on the team’s away schedule and how far they may advance in the postseason, Hughes will be earning 70-75% of his income in Minnesota, which will be subject to Minnesota’s tax rate of 9.85%. He will also pay tax to all the away states and cities on the team’s schedule. Therefore, if Hughes were a resident of Florida, the only days he would not be subject to non-resident tax are those days spent in income-tax free states and Canada. However, as a Michigan resident, Hughes will be able to take advantage of state tax laws to create significant savings.

Michigan Tax Law

Michigan’s tax law would provide Hughes some unique tax savings opportunities if he were to file as a resident. First, though not unique to maintaining Michigan residency, Hughes would be able to take a credit for taxes paid to other states, up to the tax Michigan would impose on the income, preventing double taxation of his income. In essence, the only “additional” tax Hughes would pay as a Michigan resident would be when the Wild play in states with lower tax rates than Michigan’s 4.25%. Earnings, such as from financial accounts and endorsements, would be subject, in entirety, to the 4.25% rate.

The next mechanism available to Hughes, although not exclusive to Michigan, but also not offered by every state, is an income tax reciprocal agreement. If two states have a reciprocal agreement, an individual will only pay tax on their employment income in their state of residence. Michigan has reciprocal agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin.

Minnesota’s agreement with Michigan stipulates if an individual is a resident of Michigan, who returns to their home state once a month, they are only subject to tax in their state of residence. This is where Hughes has a tremendous tax savings opportunity. Now instead of paying Minnesota’s 9.85% on 70% of his income, he will pay only 4.25% but on the entirety of his income. He will also be able to take a credit for taxes paid to other states for those states that Michigan does not have a reciprocal agreement with.

Using our proprietary Jock Tax Calculator, with Hughes set to make $6,032,297 this year and $8,250,000 next year while a member of the Wild, we calculate Hughes could save approximately $745,000 in tax on the $14,282,297 of income if he claimed Michigan residency versus Minnesota and more impressively, $469,500 by choosing to pay tax in Michigan over the tax-free Florida!

The state of Minnesota is certainly going to scrutinize Hughes’s situation given the amount of tax revenue they stand to lose. The onus will be on Hughes to provide proof of Michigan residency. If he has not previously, he should begin filing as a Michigan resident and ensuring he establishes domicile in the state.

This is where the final Michigan tax provision comes in handy for Hughes and one that he may already be familiar with after being drafted by the Canucks. In addition to providing a tax credit for taxes paid to other states, Michigan also allows residents to claim a credit for taxes paid to Canadian provinces. With Hughes' very public ties to Michigan, this should've been discussed and brought to his attention the day the Canucks called his name at the NHL Draft in Dallas. Since British Columbia’s top marginal tax rate sitting at a hefty 20.5%, Hughes would be able to take a credit for all the income that has been taxed in Canada. If Hughes has already been filing as a resident in the state, the heavy lifting of establishing Michigan domicile would have already been done.

Conclusion

Quinn Hughes has an interesting opportunity ahead of him. Claiming Michigan residency will subject his financial, endorsement, and any other sources of income to tax in the state. However, it would take him earning a substantial amount of income outside of hockey before establishing residency in Florida would become more beneficial.

On paper, it would seem like an obvious decision for all Minnesota Wild players to implement this tax strategy. However, they would need to be able to prove Michigan domicile. Quinn Hughes can do that as he owns property and regularly returns to the state throughout the year. In addition to Michigan, Minnesota has a similar reciprocal agreement with North Dakota, whose tax rate is 2.5%. Once again, a player would need to be able to prove domicile in North Dakota.

To properly execute this tax strategy proper proactive planning is necessary. It should have started by submitting a form (Form MWR) with Hughes’ on-boarding paperwork to certify Michigan residency and should continue with the filing of Hughes’ 2025 tax return. As a professional athlete, it is imperative to lean on your tax preparer when changing teams or signing new contracts to ensure you have proactively put yourself in the most favorable tax position.

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