NIL Taxes — NIL Matters™

Revenue Share is NOT NIL$20.5M cap per school per year54 schools opted out of revenue shareHouse v. NCAA settlement: $2.8BSelf-employment tax: 15.3% on NIL incomeRead every contract before signingYour sport and conference determine your ceilingNIL Collectives are not Revenue ShareRevenue Share is NOT NIL$20.5M cap per school per year54 schools opted out of revenue shareHouse v. NCAA settlement: $2.8BSelf-employment tax: 15.3% on NIL incomeRead every contract before signingYour sport and conference determine your ceilingNIL Collectives are not Revenue ShareRevenue Share is NOT NIL$20.5M cap per school per year54 schools opted out of revenue shareHouse v. NCAA settlement: $2.8BSelf-employment tax: 15.3% on NIL incomeRead every contract before signingYour sport and conference determine your ceilingNIL Collectives are not Revenue ShareRevenue Share is NOT NIL$20.5M cap per school per year54 schools opted out of revenue shareHouse v. NCAA settlement: $2.8BSelf-employment tax: 15.3% on NIL incomeRead every contract before signingYour sport and conference determine your ceilingNIL Collectives are not Revenue Share

Reality Break›

NIL income is self-employment income. That means you pay income tax AND self-employment tax — which is 15.3% on the first $168,600 of net self-employment income (2024 threshold). The 15.3% covers Social Security (12.4%) and Medicare (2.9%). Your total tax burden on NIL income is typically 28–42% when you combine both. Most athletes receive a 1099-NEC from brands — not a W-2. No withholding happens automatically. You are responsible for paying your own taxes, quarterly.

Quarterly Estimated Tax Payments›

The IRS requires estimated quarterly tax payments if you expect to owe $1,000 or more. Missing them triggers an underpayment penalty — separate from what you owe at filing. Quarterly due dates: April 15, June 15, September 15, January 15. State estimated taxes follow a similar calendar but vary by state. Set a recurring calendar reminder now.

Tax Reserve Rule — NIL Income

Set aside immediately

28%

Minimum safe reserve for most athletes

Conservative reserve

35%

If you are in a state with income tax

Set aside your reserve immediately when income hits your business account — before spending anything. Transfer your personal share after the reserve is protected.

What Most Athletes Get Wrong›

Athletes spend NIL income as it arrives, then owe a lump sum at tax time that they cannot pay. The IRS underpayment penalty is in addition to the tax owed. State penalties apply separately. Getting behind on estimated taxes creates a compounding problem that is difficult to recover from mid-season. The fix is simple: open a separate account for your tax reserve and never touch it until payment is due.

What You Should Do Next›

Open a dedicated tax reserve account — separate from your business operating account. Label it "Tax Reserve."

Set up quarterly estimated tax payment reminders (April 15, June 15, Sep 15, Jan 15).

Identify a CPA with self-employment experience — not a general tax preparer. NIL income has nuances most general preparers miss.

Track every business expense (equipment, software, travel for business purposes) — deductible expenses reduce your net self-employment income and your tax burden.

If You Do Nothing

The IRS does not care that you did not know. Underpayment penalties, late filing penalties, and state penalties compound across years. The athletes we see with tax problems all started the same way: spending NIL income as personal income without reserving for taxes.