Green Jacket for Matsuyama to Be Paired With $2 Million Taxable Purse
On Sunday, Hideki Matsuyama earned the right to wear the fabled green jacket by finishing first in the 2021 Masters Tournament at Augusta National Golf Club in Augusta, Georgia. Matsuyama, who entered the Masters as the PGA Tour’s 25th ranked golfer, defeated Will Zalatoris, who finished one stroke behind. Matsuyama is now the first male Japanese player to win a major championship. Dustin Johnson, who won last year’s Masters and is the PGA Tour’s top ranked golfer, missed the cut last Friday.
By winning the 2021 Masters, Matsuyama also wins a $2.07 million prize from the tournament’s total purse of $11.5 million. These dollar amounts are unchanged from the 2020 tournament’s payouts.
Yet Matsuyama, a 29-year-old Japanese golfer who reportedly resides in Windermere, Florida, won’t actually “take home” $2.07 million. His prize is subject to federal and Georgia tax laws (we assume Matsuyama spends at least 183 days a year in the U.S., in which case he would be taxed as a U.S. resident).
To that end, Matsuyama will pay the top federal rate, 37%, along with the top Georgia rate, 5.375%. After taxes, the prize of $2.07 million will become $1.19 million. To be clear, this is only an estimate. Matsuyama’s accountant could incorporate travel deductions, caddie tips, agent fees and other tax-altering factors that alter the net amount. But no matter how the number is computed, Matsuyama will lose a sizable portion of his winnings to both federal and state treasuries.
The Masters is often regarded as the most prestigious golf tournament. The reputational value of wearing the green jacket as worn before by such legends as Tiger Woods, Jack Nicklaus and Arnold Palmer is in some ways “priceless” for any golfer. And for Matsuyama, who tied as runner-up at the 2017 U.S. Open, the win could mean new and lucrative endorsement opportunities both at home and abroad.
Still, the Masters is not golf’s most lucrative tournament. Last month, Justin Thomas won a $2.70 million prize by finishing first at The Players Championship at TPC Sawgrass, Florida. Thomas scored the added bonus of winning in Florida, a state without an income tax. His after-tax prize was $1.70 million.
State taxes play more impactful roles in other tournaments. Last September, Bryson DeChambeau won a $2.25 million prize for winning the U.S. Open’s tournament at Winged Foot Golf Club in Mamaroneck, New York. With New York’s 8.82% state income tax, the $2.25 million prize became $1.22 million after taxes.
No sensible golfer would complain about taxes after winning an iconic tournament. But that doesn’t mean tax laws won’t significantly reduce how much the golfer will eventually take home.
(This story has corrected the winner of the 2021 Players Championship to be Justin Thomas, and not Dustin Johnson.)
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