NIL Taxes for College Athletes — What Nobody Withholds From That Check
The deal closes, the money lands, and the whole amount is sitting in your account. That's the part nobody warns you about: it looks like it's all yours, and a piece of it already belongs to the IRS.
NIL money isn't a paycheck. A job withholds taxes before you ever see the money. NIL pays you like a business — the full amount, nothing taken out — which means the withholding is your job now. On top of income tax, self-employment income owes 15.3% for Social Security and Medicare, both halves.
None of this is complicated once someone lays it out, and you're early enough that the habits are cheap to build. Set aside a share of every deal, keep the NIL money in its own account, and the tax bill becomes a line item instead of an ambush.
Your reality
The parts of this topic that hit your trade differently — and that generic advice skips.
Nobody withholds a dime
A 1099-NEC or 1099-K shows the full amount you were paid, with nothing taken out. Income tax and the 15.3% self-employment tax both come due on it. Athletes who get hurt in April are the ones who treated every deal as spending money.
The money and the bill arrive months apart
A deal that pays in October is taxed on a return you file the next spring. That gap is what makes NIL dangerous — the money feels long gone by the time the bill shows up, and there's no employer withholding to have quietly covered it.
Your deals can cross state lines
An appearance in another state, or a brand that pays from one, can create a filing where you don't live or go to school. It's routine for the people who plan for it and a mess for the people who find out later.
First moves
Three concrete steps, in order. Each one is a brick laid.
Set aside a share of every deal the day it lands
A common starting point is 25% to 30% of each NIL payment, moved into a separate account the day the money arrives — before it feels spendable. Your real number depends on your total income and where you live, so treat it as a floor, not a final answer. Keeping NIL money in its own account also means you can see what you actually earned instead of guessing.
Track what's deductible from the first deal
CoreThe costs of doing NIL work can come off the income it's taxed on — but only the ones you tracked.
Get ahead of quarterly payments and multi-state filings
CoreThe IRS expects payment through the year, not one check in the spring, and out-of-state deals add their own rules.
The rest of the playbook comes with Core
The full deduction list, the multi-state rules, and a quarterly calendar built around your own deals — plus Brix working out your set-aside from your real numbers. Start with the free BrickScore; Core is free for 14 days, no card.
Frequently asked questions
Do college athletes pay taxes on NIL money?
Yes. NIL income is self-employment income, so nobody withholds taxes from it — setting money aside is on you. You may owe income tax plus the 15.3% self-employment tax, and you may need to make quarterly estimated payments rather than paying once in April.
How much of an NIL deal should I set aside for taxes?
A common starting point is 25% to 30% of each payment, because you owe both income tax and self-employment tax on it. Your real number depends on your total income and your state, so treat that range as a floor and confirm the specifics for your situation.
Do I owe taxes in another state for an NIL deal?
You might. An appearance in another state, or a brand paying from one, can create a filing obligation there on top of your home state. It depends on the state and the amount — which is exactly the kind of question worth taking to a tax pro before the deals stack up.
See where your foundation stands — and what to build next.
Free · No credit card · No bank connection required · Done in about 5 minutes