SmokinBob
(♀) Team chargervol
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It is income to the student athlete who receives the income for his or her name, image, or likeness. Just like Tiger gets paid for wearing Nike, the players get paid for endorsing whatever. Nike deducts the $$ paid to Tiger as advertising expense.It has to be paid to a qualified charity in order to be deductible. Otherwise, it is only deductible if the person/company receiving the funds claims it as income and then you can deduct it as an expense.
Much like political contributions not being tax deductible.
My understanding is the athletes go through a class explaining the tax consequences and how to make sure they are prepared financially to pay those taxes. When one receives 1099 income (as opposed to W-2 income), one is responsible for federal tax, their portion and the “employer“ portion of social security taxes, and their portion and “employer” portion of medicare taxes as well as unemployment taxes, etc. Nothing is withheld from the payments to the athletes - they must make those payments themselves from the income received for their NIL income.