MLB (Non-Phillies) Hot Stove, 2024-25

[andyb]

Apparently the $75 million signing bonus is taxable in Florida where he lives in the offseason and not in New York for tax purposes. I see someone in NY state government thinking this is a high profile lawsuit because (lawyers weigh in please) the work he does substantially takes place in NY. We'd have every player trying to pro-rate 6 weeks of their salary in Spring Training as Florida income if this was standard, notwithstanding the numerous hedge fund managers that might play the same trick.

[zambonir]

Isn't California trying to take similar action regarding Ohtani's deferred money (since he'll be long-gone from the state by the time he's taxed on it)? Shouldn't the federal government and all the states he plays road games in do so as well?

They don't get paid in spring training though!

[andyb]

They don't get paid in spring training though!

It is required (at least something like 4 weeks) though in the MLBPA labor agreement. If a player does injury rehab in Clearwater should they avoid PA taxes as well?

[zambonir]

I thought MLB players didn't get their first season paycheck until the season started, or is that a fairly recent CBA change? The minor leaguers get paid in spring training now too of course but that's negligible.

The Phillies players have to pay PA taxes on all 162 games right? Like, just because you have to pay NYC or NY State taxes on the games at Citi doesn't mean it isn't also applied to your PA income. If not, then yes, I'd say trying to get that loophole for Florida or spring training would be legit.

And do all players with spring training in Arizona have to pay income tax there?

[andyb]

How many people could setup a job training event in FL that is a requirement for their job?

As with all tax policy it creates giant loopholes that can be avoided. If Trump follows through to eliminate taxes on tips how many people do you think will start to reclassify some of their income as tips? A contract like Soto's is so high profile that it could force some changes in laws and practices (in ways that hedge fund managers get away with every day - as in that is how Steve Cohen made his money in the first place working around taxes......)

[bkeich]

Apparently the $75 million signing bonus is taxable in Florida where he lives in the offseason and not in New York for tax purposes. I see someone in NY state government thinking this is a high profile lawsuit because (lawyers weigh in please) the work he does substantially takes place in NY. We'd have every player trying to pro-rate 6 weeks of their salary in Spring Training as Florida income if this was standard, notwithstanding the numerous hedge fund managers that might play the same trick.

I think they actually do that already in many cases. About 5 years ago some baseball player posted his tax returns and multiple states charged him when his team had away games, not all, but about 1/3 to 1/2. Florida of course has no state income taxes so I assume the players accountants / lawyers already do this trick.

I don’t know is baseball is like football, where it is JUST game checks. It could be they actually don’t get paid during Spring Training except for per diem. Not sure.

[zambonir]

That was Andrew McCutcheon and he didn't post it, he left it behind in a visitor's clubhouse where it was found and uploaded to Reddit.

McCutchen’s Pay Stub Sheds Light on Jock Tax and Jock Tax Successfully...

[fish]

So then the value of a signing bonus or deferred money to a player is they can determine what state they are taxed in when they receive it?

[zambonir]

A big part of it for sure. I'm sure Harper's signing bonus was Nevada income. But it's a lot different to avoid taxes on 10% of your contract (a bonus) versus what, 80-90% (in Ohtani's case).

[zambonir]

Dodgers get Conforto on a one-year $17 million deal. $8.5 million of it a bonus, some of it deferred. He lives in Arizona where the taxes are lot lower than they are in California.

[Philsmania]

The Phillies players have to pay PA taxes on all 162 games right?

And probably Philadelphia Wage Tax.

[andyb]

The city tax is an add-on though I assume the state tax is only paid if that state has a law that demands it - and then there would be pro-rated state taxes for the other states. Theoretically he should be paying state tax only once for any work activity though of course that would mean filing lots of state tax forms and pro-rating the income.

I am sure MLB has really good accountants available to the players that are used to this.

[zambonir]

Actually an interesting question on the wage tax, since that would be withheld/paid by the Phillies from each paycheck. Any state or other taxes paid on road trips is probably deducted off your PA return... but only if they live in PA. Not sure if you can get any similar credits from Philadelphia.

i.e.

Pennsylvania residents are subject to Pennsylvania personal income tax on all Pennsylvania taxable income classes, both Pennsylvania and non-Pennsylvania source income, though they may qualify for a resident credit for tax paid to other states on income earned outside of Pennsylvania.

Individuals who do not have either their domicile or statutory residence in Pennsylvania are considered nonresidents for personal income tax purposes. Nonresidents are taxed only on the income they receive from sources within Pennsylvania, and cannot qualify for the credit for taxes paid to other states.

https://www.pa.gov/agencies/revenue/forms-and-publications/pa-personal-income-tax-guide/brief-overview-and-filing-requirements.html#:~:text=Nonresidents%20are%20taxed%20only%20on,taxes%20paid%20to%20other%20states.

[saycheese]

Back in the day when I lived in NJ and worked in Philly I had to pay Philly wage tax for the days I was in the office. So if I worked from home 1 day a week, I paid wage tax on 4 days worth of work. Payroll hated it but it added up. I also was able to use the wage tax I paid as a Federal tax deduction.

My assumption is the Phillies, Eagles, Flyers, Sixers etc pay wage tax on any time they are in Philly. So if the Phillies play a 10 game home stand they are paying 10 games worth of wage tax. Now I am not sure how that works with visitors but I would assume its the same thing.

[mdougherty12]

Max Fried signs with the Yankees, 8 years, $218 million:

Yankees, Max Fried Agree To Eight-Year Deal

[bkox]

Max Fried signs with the Yankees, 8 years, $218 million:

wow.. he turns 31 in Jan. Means this runs through his age 39 season

[andyb]

One more year and about $2.7 million more AAV than what Nola got last year. Nola is about 6 months older so was the same baseball age roughly when signing the contract.

In comparison the Nola deal is better. He has more of a healthy track record too though of course that is no guarantee.

[zambonir]

Not the Braves, not the Mets, I'll take it.

[Philsmania]

Red Sox get Crotchet.

https://www.mlb.com/news/garrett-crochet-traded-to-red-sox-white-sox?partnerId=it-20241211-11993152-mlb-1-A&utm_id=it-20241211-11993152-mlb-1-A&lctg=1077377

Meanwhile, in Philadelphia....

[fish]

Meanwhile, in Philadelphia...

Turns out being “open-minded” is no where near as interesting as being aggressive.

Disappointing but that was a good haul for the white Sox. Teel is a better prospect than Miller right now, so it would have been hard for the Phils to beat that package.