Guiding Student-Athletes Toward a Sound Financial Future.
In 2021, the NCAA rules change and many state laws reinstated the rights for student-athletes to profit from their name, image, and likeness (NIL). In July of 2025, the NCAA made further changes, allowing colleges to directly compensate students with revenue-sharing profits.
As a result, student-athletes, particularly those considered “top tier,” may receive annual earnings in the millions. Many student-athletes are ill-prepared to manage such wealth and can quickly find themselves in serious financial trouble. Whether they make $400 or $4 million, student-athletes need to understand the tax implications and how best to plan for their financial future.
Price Kong NIL Services
Student-athletes are already managing a busy schedule of attending classes, workouts, and practice, completing schoolwork, performing in competitions and tournaments, and maintaining a social life. NIL income, while rightly deserved and earned, adds many burdens to an already busy life. Consulting with a certified public accountant (CPA) firm, like Price Kong, can help alleviate stress and ensure compliance. Our NIL team provides guidance on planning for the future to help student-athletes reach their financial goals. They are well versed on the issues student-athletes face when managing their NIL income, including tax, bookkeeping, financial consulting, and tax controversy, should issues arise with taxing authorities, such as audits and noncompliance.
NIL Contracts
All NIL contracts and endorsements should be treated like a business deal. As such, it is important for student-athletes to seek the counsel of advisors, including certified public accountant (CPA) firms, like Price Kong, before contracts are signed, as they may include complex language and terms and conditions. Our NIL team works with student-athletes receiving NIL deals to determine how best to manage income and comply with various regulations, including those governed by the Internal Revenue Service (IRS).
Taxable Income
There are many opportunities for student-athletes to profit from NIL, such as social media promotions, speaking engagements, endorsement deals, autograph signing, royalties from merchandise sales, and event appearances; however, they need to consider more than just monetary payments as taxable income when it comes to reporting NIL proceeds on their tax returns. The IRS treats in-kind gifts the same as monetary income. These gifts may include vehicles, complimentary accommodations and meals, goods and services received from a company, gift cards, cryptocurrency, and vacations. They are all taxable and must be reported, at fair market value, as income.
Student-athletes receiving at least $400 in NIL self-employment activities, or who earn a total income that is more than the IRS standard deduction ($15,000 for single taxpayers and $30,000 for married filing jointly in 2025), must report their earnings to the IRS. Every student- athlete’s situation is different. Typically, parents or guardians are able to claim college students as dependents on their own tax returns until age 24; however, once student-athletes surpass a NIL income threshold, they must file their own return. NIL income will be treated differently based on whether a student-athlete is filing their own return or being included as a dependent on another taxpayer’s return. Price Kong will review both situations to determine the best outcome.
State Taxes
In addition to reporting taxable income to the federal government, student-athletes need to also report earnings to state taxing authorities. Determining which state tax returns a student-athlete must file can be a complex issue. Typically, students attending college out of state retain their “home state” as their residence for tax purposes, meaning they would be required to file in that state.
Students also need to consider “nexus,” a term used by state taxing agencies to determine whether income generated in the state is taxable. For example, a student-athlete with an Arizona residency that shoots a commercial another state may be required to report that income to both taxing agencies. Not all states impose income taxes, but others have high tax rates. Additionally, some states have NIL income specific tax provisions that require specific compliance.
Self-Employment Taxes
Student-athletes need to be aware of self-employment taxes and quarterly tax payments. NIL earnings that exceed $400 require the student-athlete to pay social security and Medicare taxes at a rate of 15.3 percent. This is on top of any tax liability. Something to consider for the student-athletes only receiving in-kind gifts. In addition, since most student-athletes NIL income does not include a tax withholding, they may be required to make estimated quarterly payment to avoid penalties.
Tax Deductions
Based on how the student-athlete is reporting income to the IRS, they may be able to take advantage of certain deductions against earned income for expenses deemed necessary to conduct NIL business activities. Examples are cellphone and internet service, legal and marketing expenses, uncompensated travel, accommodations, and meals, and other out-of-pocket expenses related to conducting business under NIL contracts.
NIL Income and Expense Records
Detailed record keeping is crucial. Student-athletes need to maintain an organized system that includes all financial documents, including NIL contracts, in-kind gifts and their value, income sources, bank records, travel itineraries, receipts, and all other documentation related to NIL activities. These items help determine what income is taxable and whether there are deductions that can be taken when filing a return.
Financial Aid Impacts
In addition to reporting taxable income to federal and state taxing agencies, student-athletes must report gross income on their Federal Application for Federal Student Aid (FAFSA). Income earned may impact the amount of financial aid offered. This could present a major issue for student-athletes who rely on financial aid if they only received in-kind gifts and not monetary payment for their NIL activities. Not only could they lose their financial aid, but they could also end up with a significant tax liability.
Meet the NIL Team
GARY ROSS DIETRICH, CPA
[email protected] | 602.776.6344
Ross Dietrich is a licensed certified public accountant (CPA) with over 20 years of accounting experience. In addition to serving as Price Kong’s managing partner, he leads the firm’s NIL practice. Ross focuses his own practice on providing advisory services to clients in a wide range of industries. He regularly presents and publishes on NIL tax and accounting topics.
DANIEL LEE GLASGOW, CPA
[email protected] | 602.776.6316
Dan Glasgow is a licensed certified public accountant (CPA) with over 10 years of tax and accounting experience. Dan’s practice is focused on assisting clients with tax compliance and advisory services.