Name, image and likeness (NIL) income

 

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What is NIL income?

If you are a student-athlete and you receive any monetary or financial gain, in cash or non-cash, from a transaction in which you benefit from the use of your name, image or likeness, that gain is Name, Image and Likeness (NIL) income.

Effective July 1, 2021, the National College Athletics Association (NCAA) adopted the Interim NIL Policy, which lets NCAA student-athletes benefit from their NIL without jeopardizing their NCAA eligibility.

Sources of NIL income

  • Content creator/social media influencer
  • Brand endorsements
  • Sponsorship deals
  • Autograph fees
  • Promotional appearances
  • Marketing brands
  • Guest appearances at clubs and schools
  • Exhibitions
  • Endorsements
  • Gifts
  • Giveaways (gift cards)

All income from NIL activities is generally considered taxable income, including non-cash compensation, like merchandise or gift cards.

Taxation of NIL Income

If you receive NIL income, you must pay federal income tax. However, whether you (and the school or the company paying you) are also subject to employment taxes (e.g., FICA (Social Security and Medicare taxes) and federal income tax withholding) depends on whether you are being paid as an employee of the school or the company paying you. This depends on several facts and circumstances, including the degree of control that the school or the company paying you exercises over your services.

If you’re an employee, you would usually receive a Form W-2 from your employer (i.e., the school or company paying you) with FICA and federal income taxes withheld, unless an exception applies.

If you're considered an independent contractor, you should receive a Form 1099 from the school or company paying you. If you receive a Form 1099, you can consider yourself an independent contractor. 

Before you receive NIL income

Accurately complete Form W-9. Request for Taxpayer Identification Number and Certification or Form W-4, Employee’s Withholding Certificate.

How to report NIL income if it was reported on Form W-2

Student athletes are generally considered employees if they receive Form W-2, and the school or the company paying them will withhold applicable employment taxes from their pay.

  • Report income on your Form 1040 using Form W-2, which summarizes total annual earnings and the taxes already withheld. 

How to report NIL income if it was reported on Form 1099

Student-athletes are generally considered independent contractors for tax purposes if they receive Form 1099. Forms 1099 are used to report any payment totaling $600 or more during the year.

NOTE: Income or benefits you received as a student-athlete must be included in taxable income on the FAFSA (Free Application for Federal Student Aid) application and could impact the amount of financial aid granted. Pell grants are based on other factors but can also be impacted by NIL income.

State taxes

Keep track of the locations where you perform NIL contract services, because you may owe state tax to a state where you earn income from NIL activities.

Consider consulting a CPA or other tax professional before accepting an NIL contract to understand state filing impacts and to help you meet state filing requirements.

Additional resources to help you file

Paying tax on NIL income

If you are an independent contractor, there’s typically no tax withheld when you earn NIL income. Accordingly, you may need to make estimated tax payments to cover your income, Social Security and Medicare taxes throughout the year. Doing so may help you avoid a large tax bill and related penalties. Use Form 1040-ES, Estimated Tax for Individuals PDF, to figure these required tax payments.

If you don’t file the required tax returns on time, or if you fail to pay taxes you owe, you could be subject to additional penalties and interest.

If you owe tax or penalties, pay the balance as soon as possible to avoid additional penalties and interest. The IRS has various options to make a payment.

IRS online account

An IRS Online Account offers immediate access to your individual federal tax information. Your online account may have information you could need before or after the filing of your tax return.

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Page Last Reviewed or Updated: 06-Apr-2026