10/06/2026
Some Thoughts on College Athlete Compensation:
1. Name Image and Likeness (NIL) payments are taxable. There is no student-athlete exemption. Cash, collectives, posts, appearances, gift cards, and free gear can all be income.
2. Brand and collective deals are usually self-employment income, because you are doing something to earn the payment. This Reports on Schedule C, plus approx. 15.3% SE tax on top of income tax. Nothing is withheld.
3. School revenue share is often reported as royalties on a 1099-MISC, not a 1099-NEC. Same athlete, different tax. Read the form. Again nothing is withheld, need to pay estimated taxes.
4. As a general rule of thumb Park 30–40% of every third-party payment in a tax savings account (earning high yield interest). Make Estimated Tax Payments. Estimates are due Apr 15, Jun 15, Sep 15, and Jan 15.
5. Deduct real NIL costs: agent fees, contract legal, content gear, appearance travel. Keep receipts. A missing 1099 does not mean the income is free.
6. A qualified scholarship can still be tax-free. NIL is not a scholarship. Don’t confuse the two, plan to pay taxes so you don’t get a big surprise come April 15!
7. Contribute to a Roth IRA as much as you can up to the limit each year (if you have enough earned income). For 2026 max contribution is $7,500. Consider the Back Door Roth if your income is too high for a regular Roth contribution.
8. If you have NIL deals that will exceed $75k of net profit each year consider creating an S-corporation but make sure you discuss with a Tax Adviser before you do this to make sure it makes sense for your situation and to understanding all the reporting obligations.
Need help go to www.igniteyourtaxes.com and give us a call or send us a message.
