NIL money is not a scholarship
Why the IRS treats your deal like a business and what that changes.
NIL money isn't a scholarship and it isn't a paycheck. It's business income, it comes with a self-employment tax bill, and most athletes find out the spring after they spent it.
Get started — from $19/mo No credit card required · Cancel anytimeQualified scholarship money is treated one way. NIL compensation — for appearances, social posts, autographs, or licensing your name — is business income. That distinction is the entire tax bill.
Most athletes have never filed anything more complex than a W-2 summer job. NIL adds quarterly estimates, potential multi-state filing, and a return that no longer fits on a simple form.
If you're generating income from your name, image, and likeness, the costs of generating it are business expenses. Most athletes claim none of them.
Agent, marketing, and management commissions paid out of your deals.
Appearances, shoots, signings, and promotional events.
Cameras, phones, lighting, and editing tools used to produce sponsored content.
Specialized coaching, recovery, and equipment you pay for yourself.
Having someone read the deal before you sign it.
Entity setup, liability coverage, and professional fees.
The rules changed for 2026. The 1099-NEC threshold moved from $600 to $2,000, and the 1099-K threshold went back to $20,000 and more than 200 transactions.
NIL income can affect financial aid calculations and how you're claimed on a family return. Getting the structure right in year one is far cheaper than unwinding it in year three.
The rule that didn't move: all income is reportable whether or not a platform sends you a form. If your books are the only record, your books had better be right.
Here's what the year looks like when someone else holds the calendar.
Prepared by licensed CPAs and EAs who handle nil athletes constantly — not a seasonal preparer meeting your situation for the first time.
Your return comes out of reconciled monthly records, so nothing is reconstructed from memory in March.
On the Professional plan, a CPA reviews the return before it is filed.
Included on the Professional plan, so a notice is a phone call rather than a crisis.
Tax Hotline access on every plan. Ask before you sign the deal, buy the equipment, or take the write-off.
Keeps your records clean and current so you always know where you stand.
Builds the year-round strategy that shrinks the bill through planning, not scrambling.
Files accurately and on time, claiming every deduction you have earned.
Keeps everything on track and nudges you when we need something.
Why the IRS treats your deal like a business and what that changes.
You've never made one. Here's what it is, when it's due, and how much.
An autograph session in another state can create a filing obligation there.