Understanding Taxes on NIL Deals: What Student-Athletes Need to Know

Since July 1, 2021, student-athletes have been able to profit from their Name, Image, and Likeness (NIL) thanks to the NCAA’s Interim NIL Policy. While this is a game-changer for athletes, it also creates new tax responsibilities that can’t be ignored. 

What Does The IRS Consider Being NIL income? 

NIL income is any financial or non-financial benefit you receive in exchange for using your name, image, or likeness. This includes: 

When to Report NIL Income 

You must file a tax return if: 

Don’t Forget State Taxes 

If you earn NIL income in different states — for example, playing at an event or filming a promotion — you may owe taxes to those states as well. Each state has its own filing rules. 

 Key Takeaway 

Earning NIL income comes with many responsibilities. Treat your NIL activities like a business: track everything, file properly, and plan ahead for taxes. Working with a tax professional can help you maximize deductions and avoid surprises at tax time.