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| NFL Agents Requirements for Bonuses |
The NFLPA sent a memo and requirement for agents to confirm to the full tax requirements imposed by Federal Tax Code 409A. The memo reminded registered agents that the three year probationary term was coming to an end. Athletes who did not comply with 409A may lose serious revenue in taxation.
 Every signing bonus of any significant amount in the NFL is paid over a certain period of time. When a player signs a bonus of 10M, it might be paid over four years with 60% in the first two years and 20% for each year following; the payout would be over four years.
The money is deferred but guaranteed and the tax burden is spread over a certain amount of years.
The leagues position on compliance with Section 409A of the Internal Revenue Code was warning for agents to make sure compensation arrangement comply with tax provisions. Many player contracts that include certain deferred compensation arrangements may result in accelerated taxable income and/or an additional 20% tax, imposed on the player-client, unless the contracts are amended on or before December 31, 2008.” |
