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Do college athletes pay taxes on NIL money?

By McKinley Malbrough III, J.D., MS-HRM · Certified WNBA player agent

Published September 26, 2026. Last updated September 26, 2026.

Is NIL money taxable?

All of it. The IRS says income and benefits received as a student-athlete must be included in taxable income, and athletes paid on a Form 1099-NEC are generally treated as self-employed independent contractors. That includes cash, and it includes merchandise and services in kind: a free car, a product package or a paid trip is income at its fair value.

The reporting threshold changed this year. For payments received in 2026, a payer issues a 1099-NEC only when payments reach $2,000 in the year, up from $600, and the figure will be indexed for inflation after that. The tax did not change. Four $1,500 deals from four different brands can produce zero forms and $6,000 of taxable income.

What is self-employment tax?

An employee splits Social Security and Medicare with the employer. A self-employed athlete pays both halves: 12.4% for Social Security and 2.9% for Medicare, 15.3% in total, according to the IRS. It applies once net self-employment earnings reach $400 in a year. The Social Security part stops at the annual wage base, $184,500 for 2026 per the Social Security Administration; the Medicare part does not stop.

A worked example: an athlete nets $30,000 from NIL. Self-employment tax is figured on 92.35% of that, or $27,705, times 15.3%, which comes to about $4,239 before a dollar of income tax. Half of the self-employment tax is deductible when figuring income tax, which softens the total but does not erase it.

Is revenue-share money taxed the same way?

Not necessarily. Revenue sharing is a payment from your school, and schools have not all classified it the same way. Some report part or all of it as royalties for the license of your name, image and likeness on a Form 1099-MISC, which is taxable income but generally not subject to self-employment tax. Others structure it differently. Ask your compliance office in writing how the payments are reported, and give that answer to whoever prepares your return.

Does reporting a deal to NIL Go count as reporting it for taxes?

No. NIL Go is the College Sports Commission's clearinghouse for deals of $600 or more, and it exists to review whether a deal is legitimate. It is not a tax filing. The $600 NIL Go threshold and the $2,000 1099 threshold are two different rules run by two different systems, and clearing one does nothing for the other.

When are the tax payments due?

No one withholds tax from NIL checks, so the IRS expects estimated payments during the year. For 2026 income the dates are April 15, June 15 and September 15 of 2026, and January 15, 2027. Missing them can add an underpayment penalty on top of the tax. Many athletes also owe state income tax, sometimes in more than one state when paid appearances happen away from school.

What can you deduct?

Ordinary and necessary expenses of the NIL business go on Schedule C: an agent or marketing representative's fee, travel for a paid appearance, and costs of producing sponsored content. Personal spending does not become deductible because it shows up on your social feed. Keep receipts; NIL income is a stated IRS focus area.

Two situations need specialist help before you sign anything: international students, whose visa status can limit paid work in the U.S., and athletes whose families claim them as dependents, since NIL income can change the family's return.

What to do with each payment

Move part of every NIL payment into a separate account the day it lands, before any of it is spent. Keep a running list of every deal, the date paid and the amount, whether or not a form arrives. Hire a CPA who has filed athlete returns before the first estimated payment is due, not in April. And keep the pro math in view: a player headed overseas faces a different set of tax rules again.