Yes. Under the Internal Revenue Code, income includes “all income from whatever source derived.” Endorsements, sponsorships, social media promotions, appearance fees, autograph signings, and merchandise sales are all taxable.

Generally, yes. Items received in exchange for a service, such as a social media post, commercial, or appearance, are taxable at their fair market value on the date received. For example, the use of a vehicle provided in exchange for promotional work is considered compensation, not a gift. Barter arrangements are also taxable.

NIL income must be reported whether or not a Form 1099 is issued. Because some payers do not send one, particularly for informal agreements or app-based payments, student-athletes should keep their own records.

Scholarship amounts used for tuition and required fees are generally excluded from income. Amounts for housing and meals are generally taxable, as are payments for services. Revenue-sharing payments are taxable income.

In most cases, no. Most NIL income is treated as independent contractor income, so no taxes are withheld. Student-athletes are responsible for setting money aside and paying the taxes they owe, much like a small business owner.

Self-employment tax covers Social Security and Medicare for individuals who work for themselves. It is 15.3% of net earnings and is owed in addition to federal income tax. Anyone with net self-employment earnings of $400 or more in a calendar year must file a federal return, regardless of age or dependent status.

Yes. Dependent status and filing requirements are determined by separate tests. Parents may continue to claim a student-athlete as a dependent while the student-athlete files a separate return to report NIL income and self-employment tax.

NIL income alone does not end dependent status. The key factor is support: whether the student-athlete provides more than half of their own support, such as housing and food. Families should review this with a tax professional before filing.

Because taxes are not withheld from NIL income, student-athletes are generally expected to make estimated tax payments four times a year. Missed payments can result in penalties and interest, even if the full amount is paid by the April filing deadline.

Self-employment tax is based on net earnings, meaning NIL income minus ordinary and necessary business expenses. Panelists noted costs such as agent fees and certain training expenses. Student-athletes should keep receipts and confirm eligible deductions with a tax professional.

It can. Additional reported income may affect FAFSA results and eligibility for federal aid, including Pell Grants. Student-athletes should consult their financial aid office as well as a tax professional.

Generally, student-athletes file in their state of residence and in the state where their school is located and they perform NIL services. Unlike professional athletes, student-athletes generally do not file in every state where they compete. State rules vary, so student-athletes should confirm requirements with a tax professional.

Arkansas was the first state to exempt NIL compensation from state income tax, and other states are considering similar measures.

A single-member LLC does not, on its own, reduce income tax or self-employment tax. It can, however, help with contracts, separate recordkeeping, and continuity for student-athletes building a brand they plan to continue after college.

An S corporation election can reduce self-employment tax, but it requires paying a reasonable salary, running payroll, and additional filings and costs. Panelists recommended considering it only for substantial, recurring NIL income and only after a tax professional models the costs and benefits.

Tax residency for international student-athletes is determined by a day-count test, not by visa or citizenship status. Nonresidents may be subject to withholding of up to 30% on certain payments, which may be reduced under a tax treaty, and cannot own an S corporation. International student-athletes should seek specialized guidance and take care to protect their immigration status.

Research presented in Part 2 found that since NIL took effect, college basketball teams in states with low income tax rates have won about three more games per season than teams in high-tax states.

Student-athletes should keep records of every payment, item received, and contract. Recordkeeping apps make it easy to log income as it happens, including screenshots of sponsored posts. Panelists also recommend a separate bank account for NIL income and expenses.

Social media activity is public, and the IRS can review it. Differences between a student-athlete's online activity and the income reported on a tax return may draw scrutiny.

Panelists advised caution. AI tools can repeat inaccurate information found online, including arguments that NIL income is not taxable. IRS.gov is a reliable starting point, and a qualified tax professional can confirm how the rules apply.

IRS.gov offers guidance on choosing a tax professional, including red flags to watch for. Student-athletes may work with a CPA, enrolled agent, or tax attorney, depending on the complexity of their situation. Be cautious of any advisor whose advice sounds too good to be true.

IRS.gov offers an NIL resource page, a directory of tax preparers, and free filing assistance through the Volunteer Income Tax Assistance (VITA) program and IRS Free File. The Taxpayer Advocate Service also provides resources.

Athletic directors and staff can provide general education, for example that NIL income, including non-cash benefits, is generally taxable, and can encourage recordkeeping and saving for taxes. They should not provide individualized tax, accounting, or legal advice.

Staff should not review tax returns or contracts, calculate how much a student-athlete should set aside, classify income or deductions, or downplay non-cash compensation and state tax obligations.

Departments can maintain a vetted list of qualified tax professionals while making clear that the choice of advisor belongs to the student-athlete. Consistent messaging and written disclaimers help set appropriate boundaries.

Institutions can offer financial and tax literacy programming for all students, including student-athletes, covering recordkeeping, budgeting, self-employment tax, and estimated payments. The NIL Tax Playbook can be shared as part of that effort.