Josh Mullins - The Journal Record
Dec 12, 2025
Earlier this year, the House vs NCAA settlement became reality. This decision made it possible for college athletes to receive pay directly from the university at which they attend and compete.
A few years ago, I wrote a piece about Name, Image, and Likeness earnings (NIL earnings) which had just become a thing for college athletes. It was a very interesting topic of conversation as the first of my kids was preparing to head off to college. Now a few years later, I have more than one in college and the financial implications for college athletes in major NCAA Division I sports have changed significantly again.
Earlier this year, the House vs NCAA settlement became reality. This decision made it possible for college athletes to receive pay directly from the university at which they attend and compete. The University of Oklahoma reported that they would share the maximum amount allowed to student athletes who play football, men’s and women’s basketball, women’s gymnastics, softball and baseball.
What these students also need to understand and plan for, along with their parents or guardians, are the tax obligations that will also be a part of that potential financial windfall for these athletes. NIL earnings are subject to self-employment tax and income tax. Since NIL payments are not directly from the universities, the student athlete needs to expect to save an appropriate amount to cover the tax for those earnings. These earnings could be from things like social media, advertising, even goods in exchange for the NIL deal. Goods could be a vehicle, clothing, or ownership in a business, and all these things could be considered taxable income.
With the House vs NCAA settlement, schools are now allowed to share revenue they receive with their student athletes. Currently, the environment indicates these payments will be reported as non-employee compensation, which would subject a student athlete to self-employment and income tax on those earnings. Putting the full tax burden of the income on the student.
This begs the question, what potential deductions could a student use to reduce their tax burden from this income. Do they have agent fees, advisor fees, are they creating their own brand that contracts with the school for their services and if so, are they doing this through an advanced tax structure?
These aren’t the only questions the changing environment has created. As these students are now being paid directly by the university they attend to play a sport, there is much talk about whether student athletes should be considered employees of the university they attend.
There are many questions that still need to be answered to determine if they should be, and if they are what are the questions that should be asked next. Will they organize like professional athletes do in their respective sports? Will schools have to provide benefits? Will NCAA athletes be pushed to sign multi-year contracts with a school which could slow down the transfer portal?
It isn’t very often we get to see new business models built in today’s day and age, but college athletics is in the process of trying to figure it out and it will be a very interesting journey.