NIL, taxes & Professions

[AgaveMaria]

A lot of College athletes are now being paid. Some Millions of $$$.

Do the schools now have tax and financial advisors to help them avoid tax complications? If not, are the schools liable in some way when the kid goes broke?

Do they now have to declare themselves Professional Athletes?

With the money do they have to declare room & board, tuition paid and such as income?

Looks like a whole new set of problems.

[Caveira]

10 minutes ago, AgaveMaria said:

A lot of College athletes are now being paid. Some Millions of $$$.

Do the schools now have tax and financial advisors to help them avoid tax complications? If not, are the schools liable in some way when the kid goes broke?

Do they now have to declare themselves Professional Athletes?

With the money do they have to declare room & board, tuition paid and such as income?

Looks like a whole new set of problems.

No.  No.   No.   no.  Um.   No.  No.  And no.  

[ionel]

1 hour ago, AgaveMaria said:

A lot of College athletes are now being paid. Some Millions of $$$.

Do the schools now have tax and financial advisors to help them avoid tax complications? If not, are the schools liable in some way when the kid goes broke?

Do they now have to declare themselves Professional Athletes?

With the money do they have to declare room & board, tuition paid and such as income?

Looks like a whole new set of problems.

Is the money coming from the "schools?"

[scourge165]

1 hour ago, Caveira said:

No.  No.   No.   no.  Um.   No.  No.  And no.  

 

1 hour ago, AgaveMaria said:

With the money do they have to declare room & board, tuition paid and such as income?

Yes.

That is taxable income. If part of the deal is someone paying 40K for your education, that is considered taxable income. 

 

 

They don't  have to declare "themselves as professional athletes," just...self-employed. 

[Wrestleknownothing]

21 minutes ago, scourge165 said:

 

Yes.

That is taxable income. If part of the deal is someone paying 40K for your education, that is considered taxable income. 

 

 

They don't  have to declare "themselves as professional athletes," just...self-employed. 

To ne clear (because the OP is rarely clear), if it is a scholarship then it is not taxable. If a third party pays, it may be taxable to some extent.

[scourge165]

1 hour ago, Wrestleknownothing said:

To ne clear (because the OP is rarely clear), if it is a scholarship then it is not taxable. If a third party pays, it may be taxable to some extent.

Well, if it's a scholarship, obviously you can't tax that, but they were talking about NIL money. There's zero chance PSU had all those guys on full Scholarships. I assumed he was talking about a Suriano type deal where they pay you what tuition and room and board is and then pay you on top of that. 

 

That said, this seemed pretty clear. 

3 hours ago, AgaveMaria said:

With the money do they have to declare room & board, tuition paid and such as income?

[Dark Energy]

It is a good Q.  Like others said, if from outside school and not a scholarship, taxable.

Now, what should it be going forward?  Seems like all should be taxable including ‘scholarship’ since that is now just a thin / sham cover for being paid for a service that is important to the university … just like other employees.  Seems like they should be considered professional athletes being paid by the school.  Let’s not kid ourselves.  At least for those schools that sign into the revenue share model.  It is revenue share after all.  

[Caveira]

9 hours ago, scourge165 said:

 

Yes.

That is taxable income. If part of the deal is someone paying 40K for your education, that is considered taxable income. 

 

 

They don't  have to declare "themselves as professional athletes," just...self-employed. 

His first question isn’t do the kids pay taxes on nil.  Of course they do.  I was saying basically none of this is on the colleges.  They don’t need advisors etc.  

Edited April 20 by Caveira

[AgaveMaria]

2 hours ago, Caveira said:

His first question isn’t do the kids pay taxes on nil.  Of course they do.  I was saying basically none of this is on the colleges.  They don’t need advisors etc.  

When statistics show the majority of Professional Athletes have serious financial problems within a few years after retirement - they need solid financial advice.

Attending a University and getting paid for it the schools need to provide solid support in the way of financial counseling. Not doing so pretty well assures one or more of those who hit the financial skids later will blame the school and an enterprising lawyer will file suit against the institution for them.

  As an example, Vince Young earned around $26 million in six seasons playing professional football.  Young trusted the wrong financial planner who reportedly misappropriated $5.5 million of his money.  Because of this and poor spending habits, Young was forced to file bankruptcy.

Baseball great Curt Schilling  saw a future in video games and spent $50 million in creating his own company, 38 Studios.  Fast forward a couple years.  38 Studios filed bankruptcy, and Schilling is out his $50 million investment.

Big earnings early without sound business advice and planning leads to problems.

Edited April 20 by AgaveMaria

[Wrestleknownothing]

2 minutes ago, AgaveMaria said:

When statistics show the majority of Professional Athletes have serious financial problems within a few years after retirement - they need solid financial advice.

Attending a University and getting paid for it the schools need to provide solid support in the way of financial counseling. Not doing so pretty well assures one or more of those who hit the financial skids later will blame the school and an enterprising lawyer will file suit against the institution for them.

 

Meh

[Caveira]

19 minutes ago, AgaveMaria said:

When statistics show the majority of Professional Athletes have serious financial problems within a few years after retirement - they need solid financial advice.

Attending a University and getting paid for it the schools need to provide solid support in the way of financial counseling. Not doing so pretty well assures one or more of those who hit the financial skids later will blame the school and an enterprising lawyer will file suit against the institution for them.

  As an example, Vince Young earned around $26 million in six seasons playing professional football.  Young trusted the wrong financial planner who reportedly misappropriated $5.5 million of his money.  Because of this and poor spending habits, Young was forced to file bankruptcy.

Baseball great Curt Schilling  saw a future in video games and spent $50 million in creating his own company, 38 Studios.  Fast forward a couple years.  38 Studios filed bankruptcy, and Schilling is out his $50 million investment.

Big earnings early without sound business advice and planning leads to problems.

Colleges sell education.  There are these things called classes they can take.  I may recommend personal finance or a financial literacy class.   If you’re going to make a bazillion off wrestling…. It’s probably worth the time to take an extra elective class.  Shyte they’re hardly paying for college as it is.  Maybe if they weren’t taking fluff majors and taking college seriously they would learn something.  
 

Why limit bad business decisions to athletes.  Humans make bad business decisions all the time.  Should colleges offer free advice for them?

it’s literally a giant campus literally dedicated to higher education and Learning lol   

 

Edited April 20 by Caveira

[CHROMEBIRD]

There's likely consensus here on whether NIL deals should be taxable; the bigger issue is that without a national clearinghouse, it's all patchwork and unregulated. There are definitely athletes who take NIL money under the table, which is also a reason why some kids are saying they aren't getting paid for whatever deal they agreed to. Other athletes are persuaded into signing NIL deals structured as predatory loans or some illiquid financial instrument to avoid taxation (and for more money upfront). I don't blame BIGSPORT kids for signing with agents to navigate all this, but it can't imagine wrestlers or other non-revenue sport athletes giving up a cut of their meager NIL deals (or agents being interested enough), nor finding the minimal guidance most athletic departments provide to be adequate.

[HokieDave87]

4 hours ago, Caveira said:

Colleges sell education.  There are these things called classes they can take.  I may recommend personal finance or a financial literacy class.   If you’re going to make a bazillion off wrestling…. It’s probably worth the time to take an extra elective class.  Shyte they’re hardly paying for college as it is.  Maybe if they weren’t taking fluff majors and taking college seriously they would learn something.  
 

Why limit bad business decisions to athletes.  Humans make bad business decisions all the time.  Should colleges offer free advice for them?

it’s literally a giant campus literally dedicated to higher education and Learning lol   

 

Just FYI I do know some NIL collectives have financial resources on staff to help the students out, whether in a classroom setting or not the kids have access to guidance from financially literate grown ups. I'd bet 90% use intelligent resources available. I'd bet the 10% that don't have parents that are a bit too involved in the money part of their children's lives and not the being a good parent part.

[CHROMEBIRD]

21 hours ago, HokieDave87 said:

Just FYI I do know some NIL collectives have financial resources on staff to help the students out, whether in a classroom setting or not the kids have access to guidance from financially literate grown ups. I'd bet 90% use intelligent resources available. I'd bet the 10% that don't have parents that are a bit too involved in the money part of their children's lives and not the being a good parent part.

I know the assistance provided to athletes is extremely scattershot, but my impression is that it's not nearly enough because athletic departments don't have the resources or scale to provide meaningful guidance around the intricacies of every deal for every athlete under their roof. Fortunately, most deals are probably legit and transacted in good faith, but athletes are still easily outflanked by bad actors if they don't have the personal resources or draw to bring on an agent, lawyer, or some other professional advisor.

[EntertainMe]

On 4/20/2025 at 11:17 AM, AgaveMaria said:

When statistics show the majority of Professional Athletes have serious financial problems within a few years after retirement - they need solid financial advice.

Attending a University and getting paid for it the schools need to provide solid support in the way of financial counseling. Not doing so pretty well assures one or more of those who hit the financial skids later will blame the school and an enterprising lawyer will file suit against the institution for them.

  As an example, Vince Young earned around $26 million in six seasons playing professional football.  Young trusted the wrong financial planner who reportedly misappropriated $5.5 million of his money.  Because of this and poor spending habits, Young was forced to file bankruptcy.

Baseball great Curt Schilling  saw a future in video games and spent $50 million in creating his own company, 38 Studios.  Fast forward a couple years.  38 Studios filed bankruptcy, and Schilling is out his $50 million investment.

Big earnings early without sound business advice and planning leads to problems.

Don't forget the other giant debt-causing machine. Those far to easy to get credit card volchers that have been on campuses sucking the souls of kids since they started giving kick backs to colleges, just for prime time and location to the students.

[alex1fly]

NIL is taxable income. 
 

Universities often are clueless about post-academic life. 

[Caveira]

2 hours ago, alex1fly said:

NIL is taxable income. 
 

Universities often are clueless about post-academic life. 

Those who can.   Do.   Those who can’t.   Teach?

[1032004]

OSU is hiring a position with the below description, and I believe PSU and probably other schools have similar, with a specific mention of NIL.  Maybe not quite a “tax advisor,” but would probably count as a “resource”:

Works directly with Head Coach of Wrestling to manage and assist administrative functions of the Head Coach. Responsibilities include but not limited to, daily correspondence with compliance, business office, assisting in facility communication with arena management and other sports, and serve as liaison to all campus organizations. Coordinates and facilitates outside NIL agreements and partnerships. Position is responsible for the actions of administrative positions. Assist head coach in any other duties required.
 

[CHROMEBIRD]

19 hours ago, 1032004 said:

OSU is hiring a position with the below description, and I believe PSU and probably other schools have similar, with a specific mention of NIL.  Maybe not quite a “tax advisor,” but would probably count as a “resource”:

Works directly with Head Coach of Wrestling to manage and assist administrative functions of the Head Coach. Responsibilities include but not limited to, daily correspondence with compliance, business office, assisting in facility communication with arena management and other sports, and serve as liaison to all campus organizations. Coordinates and facilitates outside NIL agreements and partnerships. Position is responsible for the actions of administrative positions. Assist head coach in any other duties required.
 

Pretty cool that the staffer would focus specifically on outside NIL deals. I know some other schools have GMs for fb/bb (or the entire athletic dept), but that's more to manage the program's NIL/future salary budget and roster size rather than helping kids with their agreements. Outside NIL sponsorships won't count towards the salary limit under the House settlement, right?

[GreenandGold]

On 4/22/2025 at 1:22 PM, CHROMEBIRD said:

Pretty cool that the staffer would focus specifically on outside NIL deals. I know some other schools have GMs for fb/bb (or the entire athletic dept), but that's more to manage the program's NIL/future salary budget and roster size rather than helping kids with their agreements. Outside NIL sponsorships won't count towards the salary limit under the House settlement, right?

It is my understanding that outside NIL deals would continue to operate as they are now, which is unregulated and uncapped. The only "rule" with NIL right now is that schools are not supposed to negotiate or be involved in those deals directly. We all know that's not actually happening but it is the intent.