How to taxes work in the NHL?

Question

How do NHL players get charged income tax? Since the NHL is played in both Canada and in the USA wouldn't the Canadian teams be at a disadvatage signing free agents because there is higher income tax in Canada? But i have never heard anything about players not signing in Canada because of taxes. Did the NHLPA work out some sort of deal with the goverments of these 2 countries?

Answer 1

The income the NHL player makes is allocated by where the games are played.  So if they play 1/10th of the season in Canada, then 1/10th of the income is Canadian-source, the rest is US-source.  It doesn't matter where they signed.

For US citizens, they include worldwide income on their tax return AND pay taxes to Canada on the Canadian-source income.  Yes, the Canadian taxes are often higher, so they do not get all of the Canadian tax back in a form of a credit.

For non-US citizens, they file a US tax return (1040NR) to show only the US-source income.  They get a credit on the Canadian return and due to lower taxes, won't owe more than the extra cost of doing the tax return.