Income Tax Planning Approaches for College Athletes Earning Income through Name, Image, and Likeness Compensation
DOI:
https://doi.org/10.18060/29472Keywords:
tax obligations, residency and income sourcing, financial literacy, NCAA, NILAbstract
The emergence of name, image, and likeness (NIL) opportunities has transformed collegiate athletics, providing athletes with unprecedented avenues for income. However, the robust NIL marketplace has also introduced complex tax, financial, and legal responsibilities college athletes often navigate on their own. This study examines the tax implications of NIL compensation for college athletes in the United States through five illustrative case studies, highlighting the impact of state residency, income source, compensation type, and entity structuring on federal and state tax obligations. We demonstrate common scenarios in which college athletes may face multi-state taxation, non-cash compensation treated as taxable income, and that limited NIL earnings may fall below filing thresholds. The study also situates NIL obligations within broader academic and structural challenges, emphasizing that many college athletes enter college with educational inequities and minimal financial literacy. Drawing on extant research, the authors underscore the critical need for institutional support, financial education, and policy interventions to ensure athletes can navigate NIL opportunities effectively while maintaining compliance and long-term academic and financial wellbeing.
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