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What Student-Athletes Need to Know this Tax Season

Tax Tips for College Athletes with NIL Brand Deals Sponsored by: TaxAct

SAN DIEGO — Late in 2021, the NCAA began allowing college athletes to earn income from the use of their name, image and likeness. That means the door was opened to exciting endorsement deals and profitable partnerships in 2022, a potentially lucrative opportunity. While this may be a welcome change for college athletes, engaging in brand deals also creates a complex tax situation. This year many student-athletes across the country who earned NIL income will file taxes for the first time.

Income falls into two categories – monetary and non-cash for payments made to an athlete for endorsements, appearances and social media partnerships. But non-cash compensation can often be challenging to identify. Did you know that trips, apparel and athletic equipment are also considered taxable NIL income and must be reported on a tax return?

The IRS looks at college athletes as independent contractors and NIL income to be self-employed income. Athletes who receive $600 or more in NIL compensation will receive Form 1099-NEC.

Fortunately TaxAct, a leading DIY tax software provider, is on a mission to help all filers navigate this change and confidently file their returns with ease.

Mark Jaeger, VP of Tax Operations at TaxAct, joins our Laura Cavanaugh to talk through this new tax landscape for student-athletes.

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