NIL Tax Guide for College Athletes: Reporting Income from Sponsorships and Deals
Since the NCAA changed its rules in 2021, college athletes across the country have started earning income from their Name, Image, and Likeness (NIL). Whether you’re landing local sponsorships, partnering with national brands, or monetizing your social media presence, one thing is for sure:
You now have to pay taxes.
For many student-athletes, NIL is their first experience with self-employment income—and the IRS doesn’t offer much wiggle room for beginners. Here’s how to stay compliant, avoid penalties, and keep more of what you earn.
1. Yes, NIL Income Is Taxable
If you’re receiving money, products, or services in exchange for promoting a brand or appearing in content, the IRS considers that taxable income—no exceptions.
This includes:
- Sponsored posts on Instagram, TikTok, or YouTube
- Autograph signings
- Appearances or speaking engagements
- Affiliate codes and promo deals
- Free gear, hotel stays, meals, or travel (if part of a paid agreement)
Even non-cash compensation—like a free laptop or clothing—is still reportable if given in exchange for your NIL.
Need help tracking your deals and gifts? Our bookkeeping services are ideal for student-athletes managing multiple sources of income.
2. Expect to Receive a 1099 (Or Not)
If a brand or collective pays you over $600 in a year, they’re required to send you a 1099-NEC or 1099-K (depending on how they pay). But if you don’t get a form, you’re still responsible for reporting the income.
That’s why it’s essential to keep your own records of:
- Contracts
- Payment confirmations
- Invoices
- Free products or services
If you need help organizing all of this, our CPA services for NIL athletes include digital tracking tools and quarterly check-ins so nothing falls through the cracks.
3. Save for Self-Employment Taxes and Make Quarterly Payments
Most NIL income is considered self-employment income, which means you’ll need to pay:
- Income tax (federal and possibly state)
- Self-employment tax (15.3% for Social Security and Medicare)
Since NIL deals typically don’t withhold taxes, you’re responsible for estimated tax payments—due quarterly throughout the year.
We recommend setting aside 25–30% of your NIL income for taxes, especially if you’re not working with a school-sponsored financial advisor.
Our team helps student-athletes set up payment plans and stay ahead of their obligations.
4. Take Advantage of Business Deductions
The good news? You may be eligible for tax deductions that can reduce your taxable income. As a self-employed NIL earner, you can deduct:
- Website hosting or domain costs
- Camera, phone, or editing software used for content
- Travel expenses for paid appearances
- Marketing or graphic design services
- Business use of your home or car (must meet IRS standards)
The key is separating personal and business expenses—and documenting everything clearly.
5. Consider Forming an LLC (Later)
Most college athletes don’t need to start with an LLC or S Corp, but once your NIL income becomes substantial—especially over $50K annually—it may be worth it.
Forming an entity can:
- Provide liability protection
- Open up additional deductions and tax benefits
- Help you look more professional to sponsors
Our small business CPAs work with young entrepreneurs—including athletes—to weigh the pros and cons of incorporation.
Final Thoughts: NIL is a Game-Changer—But So Are Taxes
Earning money through your name, image, and likeness is a huge opportunity for athletes —but it also comes with serious responsibilities. The IRS doesn’t care if you’re still in college, and they won’t go easy on late filings or unpaid taxes.
At Hogan CPA, we help college athletes navigate NIL income with clarity and confidence—from 1099 tracking and expense planning to quarterly payments and long-term strategy.
Just signed your first NIL deal? Let’s make sure your taxes are handled the right way.
Contact Hogan CPA Financial Services for a confidential consultation tailored to student-athletes and NIL earners.