Yes, college athletes earning income from Name, Image, and Likeness (NIL) deals can be subject to the “jock tax” in certain states.
Table of contents
What Is the Jock Tax?
The “jock tax” is a state and local income tax imposed on non-resident athletes (and sometimes entertainers) for income earned while performing or competing in a particular state or city. Traditionally, this tax applied to professional athletes who travel and earn income in multiple states, requiring them to file non-resident tax returns in each state where they compete.
How Does the Jock Tax Apply to NIL Athletes?
- State Taxation of NIL Income: As college athletes now earn NIL income, states that impose a jock tax can apply similar rules to student-athletes. This means that if a college athlete earns NIL income (such as for autograph signings, personal appearances, or promotional events) while physically present in a state where they are not a resident, that state can tax the portion of income earned there.
- Filing Requirements: NIL athletes may be required to file non-resident state income tax returns for each state where they earn NIL income, just like professional athletes. This can include income from events, endorsements, or appearances that take place in multiple states.
- Self-Employment Tax: NIL income is generally treated as self-employment income for federal tax purposes, which means student-athletes are also responsible for federal self-employment taxes in addition to any state or local taxes.
Practical Implications
- Record-Keeping: NIL athletes must keep detailed records of where and when they earn income, as this determines their state tax obligations2.
- State Variability: Not all states have a jock tax or a state income tax. States like Texas, Florida, and Tennessee do not impose a state income tax, giving them a potential recruiting advantage for athletes who want to minimize tax exposure.
- Complexity: The jock tax can make tax filing much more complicated for NIL athletes, especially those with significant earnings and frequent travel.
Summary Table: NIL Athletes and the Jock Tax
| Topic | Applies to NIL Athletes? | Details |
| Jock Tax | Yes | States may tax NIL income earned by non-resident athletes during in-state appearances |
| Federal Self-Employment | Yes | NIL income is self-employment income, subject to federal self-employment tax |
| State Income Tax Returns | Yes | Required for each state where NIL income is earned, if that state imposes such a tax |
| States Without Income Tax | No | NIL athletes do not pay state income tax in states like Texas, Florida, Tennessee |
Conclusion
NIL athletes are increasingly subject to the same tax complexities as professional athletes, including the jock tax in states where they earn income as non-residents. Careful planning and record-keeping are essential to manage these obligations and avoid surprises at tax time.
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