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Stanley Cup Playoffs Provide Tax Savings


For US resident hockey players, playing outside the United States borders in two Canadian hub cities in this year’s Stanley Cup playoffs could mean substantial tax savings on their US state tax returns and the longer they stay within the bubble the larger those tax savings could be!


In March when the COVID-19 pandemic hit the United States and Canada, the National Hockey League (NHL) put their season on pause. Ultimately, the league opted to cancel the final 24 days of the regular season and resume play with an expanded playoff in two “hub cities,” Edmonton and Toronto. The change in schedule has completely changed the tax landscape, however, depending on one’s residency at both the federal and state level along with how long they remain in the “bubble” will dictate the amount of savings they can expect to see.

Taxes within the Bubble

Under the US-Canadian tax treaty – neither US nor Canadian residents will experience any tax impact by spending additional days in Canada at the federal level. However, where there are savings opportunities are for US residents at the state level and the amount of ‘jock tax’ they will have to pay in non-resident tax to US states and cities.

States and cities that enforce non-residence income tax – also referred to as a ‘jock tax’ – allocate an athlete’s income earned in that state by taking the percentage of days in the state (or city) and dividing them by the total days in the season. Known as the duty day allocation formula, it takes into consideration all days and includes both the preseason, including any days spent in mandatory training camp, and postseason. Below is the equation for how salary is allocated in non-resident states or cities.

As a player increases their total duty days, in this situation spending more time in the bubble, their allocated salary to states and cities in which they are non-residents will decrease. Therefore, the tax on that income will also decrease and since there is no tax consequence for days in Canada those represent tax savings.

The level of tax savings is directly dependent on the resident state of the player. Players who are residents of states with no income tax will benefit the greatest as every non-resident tax dollar saved is a direct tax savings. As the state tax rate increases, the tax savings decrease. This is due to resident tax credits for non-resident taxes paid to another state. Tax credits for non-resident taxes paid to other states in turn lowers the tax liability in their home state. The result is that for every dollar saved in non-resident tax, the player will simply face an additional dollar in tax liability in their home state. Ultimately, the only true tax savings will be if less tax is paid to states with a higher tax rate than the resident state and to non-resident cities.

Case Study: Mark Stone and Anders Lee

To illustrate the financial benefits to staying in the bubble we will use the example of two current players participating in the bubble, Las Vegas Golden Knights’ forward, Mark Stone, and New York Islanders’ captain, Anders Lee. The two players provide the perfect example of how salary and state residency play a role in their extended stay in the bubble.

This season both Lee and Stone were scheduled to play in 13 states and five cities that impose non-resident tax. Because of the loss of regular season games, Lee’s Islanders avoided additional games in Pittsburgh, New Jersey, Philadelphia, and Columbus which impose a non-resident income tax. Stone’s Golden Knights avoided additional games in Minnesota and Arizona, and their only scheduled trip to Colorado.


To determine the tax consequences, we have made a few assumptions and applied them to both Stone and Lee.

  1. No escrow is taken from the salary and it is assumed to be earned in one tax year

  2. Both players will file as US residents and single

  3. Both players will be residents of the state in which their team resides

The Impact on Mark Stone

Mark Stone is scheduled to earn $12M this season while a member of the Golden Knights. As a resident of Nevada, every additional day Stone spends in the bubble decreases his allocation of earnings and tax in non-resident tax or ‘jock tax.’ By adding 47 additional days to his allocated salary it lowers his income earned in jock tax jurisdictions by $515,634 for a savings of $36,182 in ‘jock tax.’

For Stone, ever dollar saved in ‘jock tax’ is an additional dollar returned to him as a tax savings! Below, is a breakdown of Stone’s situation, looking at what was originally scheduled (206 days) versus what could occur if the Golden Knights spend the maximum time in the bubble (263 days).

The Impact on Andres Lee

Anders Lee is scheduled to make $9M this season as a member of the Islanders. As a resident of New York, Lee is subject to the highest resident tax of remaining players inside the bubble. Although Lee’s non-resident income and tax is lowered by $27,412 the actual tax savings is eroded by the fact that Lee also loses the tax credit for this tax and his New York state tax paid increases by $20,832.

Although Stone received a 100% deduction in his ‘jock tax’ paid, Lee only receives benefits for the taxes paid in states with higher tax rates (California and New Jersey) and the cities that New York does not provide any credit for taxes paid.

Here, we see Lee with minimal tax savings of $6,580 if the Islanders go seven games in the Stanley Cup Finals is considerably less than Stone’s savings of $36,182.

No Tax Advantage for Canadian Residents

The same tax savings do not apply to players who are residents of Canada. Although the days up in Canada do lower the income and ‘jock tax’ paid to states in the US – it also lowers the foreign tax credit for those taxes on their Canadian tax return. This is similar to the scenario with residents from high income tax states, like Lee in New York.

There are two differences for Lee and a Canadian resident. First, Lee is not able to take a resident credit for taxes paid to cities, but Canadians may. Second, Lee benefits in California and New Jersey because both those states have higher tax rates than New York. For Canadians, there is no state with a higher tax rate than they face in Canada. The end result for Canadian residents is that for every dollar saved in ‘jock tax’ paid in the US it lowers their foreign tax credit and increases the amount of tax liability in Canada by the same amount essentially eliminating any tax savings.


The examples of Stone and Lee show that state of residence, salary, and the additional duty days accumulated from playing in the bubble will all have an impact on a player’s potential tax savings in this year’s run for the Stanley Cup.

In summary:

  1. US residents playing in a no or low tax state will benefit the most. As the income tax rate increases, the less benefit they will receive.

  2. Players who earn more will save more.

  3. The longer a player remains in the playoffs the lower the jock tax they will pay.

  4. Players who reside in Canada do not see any tax savings as the loss of non-resident state or foreign tax credits increases their resident tax by the same amount therefore eliminating any tax savings.

This article demonstrates one of many unique complexities that professional athletes face in their profession. AFP Tax specializes in tax preparation and planning for professional athletes and can help you or your clients navigate this landscape.

ALAN POGROSZEWSKI is an Associate Professor of Sports Studies at St. John Fisher College and the President of his own tax consulting business whose clientele include professional athletes performing services on three separate continents. Prior to accepting his position at St. John Fisher College, Mr. Pogroszewski was the Vice President of Business Operations for Bartlett Hockey (formally Sports Consulting Group), a firm that specializes in the representation of professional hockey players. Mr. Pogroszewski received his M.B.A. from Rochester Institute of Technology in 1996 and his M.S. in Taxation from St. John Fisher in 2003.

KYLE STICH is the Director of Operations and a tax specialist at AFP Tax. Kyle has a dual BS degree from St. John Fisher College in Accounting and Sport Management. He went on to earn his Master’s Degree in Sport Management with a concentration in Sport Analytics from Columbia University. Kyle joined AFP Tax in 2016 and assists in tax preparation and government correspondences. In addition to his time at AFP Tax, he has also spent time working as a tax specialist at Bartlett Hockey (formally Sports Consulting Group) and a client finance analyst and tax specialist at The Doman Group, a wealth management firm that primarily works with professional football players. In addition to his tax work, Kyle operates AFP Analytics, where he specializes in player valuation and consults on player contract negotiations. He also has served as an adjunct professor at St. John Fisher College since 2017 where he teaches Sport Management students finance, budgeting, and analytics.


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