--- title: "NIL & Taxes: What Aiken College Athletes Need to Know" url: https://www.hereaiken.com/2026/05/31/nil-taxes-college-athletes/ date: 2026-05-31T14:35:06-04:00 modified: 2026-05-31T14:38:43-04:00 author: "" categories: ["College NIL", "Sports"] site: "HERE Aiken" attribution: "HERE Aiken" --- # NIL & Taxes: What Aiken College Athletes Need to Know > NIL income is taxable. Here's the plain-language breakdown of 1099s, self-employment tax, and how to stay compliant as a college athlete. *Source: [HERE Aiken](https://www.hereaiken.com/2026/05/31/nil-taxes-college-athletes/) — May 31, 2026 by * If a Aiken college athlete signs an NIL deal, the IRS treats them as a small business. That sentence catches a lot of athletes — and their parents — by surprise. This guide explains what taxes apply to NIL income, what paperwork to expect, and what to do before the money lands in the bank account. ## The headline: NIL income is taxable There is no NIL-specific tax exemption. Money an athlete earns from endorsements, social media posts, paid appearances, autograph signings, or camps is **ordinary taxable income**. It also counts for things like Pell Grant calculations and FAFSA the following year, which is a separate conversation worth having with the financial aid office. ## You are probably self-employed for tax purposes When a business pays an athlete for an endorsement, the business is hiring an independent contractor — not an employee. That means: - **No taxes are withheld.** The check comes in at face value; nobody is taking out federal income tax, state income tax, or payroll taxes for you. - **You owe self-employment tax.** That’s 15.3% on net earnings — 12.4% Social Security plus 2.9% Medicare. This is on top of federal and state income tax. - **You owe federal income tax.** Your NIL income stacks on top of any other income (scholarship money treated as taxable, summer job, etc.) and is taxed at your marginal federal rate. - **You owe South Carolina state income tax.** Rates and brackets are at the SC Department of Revenue. The practical effect: when an athlete signs a deal for $5,000, the actual take-home after federal income tax, self-employment tax, and SC income tax is often closer to $3,000–$3,500. Pretending the gross is yours is the most common NIL tax mistake. ## What paperwork to expect - **Form W-9.** The paying business will ask you to fill this out before they cut a check. It’s how they get your Social Security number or EIN for their records. - **Form 1099-NEC.** If a single payer pays you $600 or more in a calendar year, they’re required to send you and the IRS a 1099-NEC by January 31. Save every one. - **Form 1099-K.** If you’re paid through a platform (PayPal, Venmo for business, a brand-deal marketplace), the platform may issue a 1099-K. Don’t double-count income that appears on both a 1099-NEC and a 1099-K. - **Schedule C and Schedule SE.** When you file your federal return, NIL income goes on Schedule C (business income) and self-employment tax is calculated on Schedule SE. ## Quarterly estimated taxes — the part nobody warns you about If you owe more than $1,000 in federal tax beyond what’s withheld, the IRS expects **quarterly estimated payments** — April 15, June 15, September 15, and the following January 15. Miss them and you owe penalties even if you pay in full on April 15 of the following year. A practical first-year approach: take 30% of every NIL payment as it lands and move it to a separate savings account. That’s your tax money. It is not yours to spend. When the quarterly deadline hits, you have the money to pay. ## Deductions are real — track them Self-employed athletes can deduct ordinary business expenses against NIL income. The big categories: - Equipment used to produce content (camera, lighting, microphone, editing software). - Mileage to NIL appearances and shoots — IRS standard mileage rate. - Phone and internet — the business-use portion only. - Professional fees — agent commissions, attorney contract reviews, accountant fees. - Travel for paid appearances when the trip is for the deal. Keep receipts. Keep a mileage log. The IRS does not accept “I think I drove about that much” if it audits. ## A simple system A starting framework for any Aiken college athlete doing NIL: 1. Open a separate bank account just for NIL income and expenses. 2. As each payment lands, transfer 30% to a separate “taxes” savings account. 3. Track every business expense in a spreadsheet or a free tool like Wave or QuickBooks Self-Employed. 4. Hire a tax preparer — not TurboTax — for your first NIL year. An accountant who handles small businesses costs $300–$600 and will pay for themselves the first time they catch a deduction or avoid a penalty. ## What this is not This is general information, not tax advice. Tax law changes, individual situations vary, and Aiken athletes weighing real money should talk to a CPA or enrolled agent before April 15. HEREAiken can connect athletes with verified local tax professionals through the [HEREAiken Business Directory](/business-directory/).