NIL taxes · 2026
NIL money is taxed like a small business's income, and nothing is withheld. Here is what you owe on it in 2026, how much to set aside from each payment, and when the IRS expects it.
Yes. Pay for endorsements, posts, appearances and licensing your name or likeness is income, usually paid on a 1099 as self-employment income with no tax withheld. You owe self-employment tax, federal income tax and, in most states, state income tax on it.
It's taxable whether or not you get a tax form. From 2026, a brand has to send a 1099-NEC only when it pays you $2,000 or more in a year (it was $600 before), but smaller payments are still income.
Self-employment tax is 15.3% of 92.35% of your net NIL earnings, for Social Security and Medicare. Federal income tax runs from 10% to 37% on what's left after deductions. State income tax depends on where you live, and 9 states charge none on earned income.
| Tax | Rate | Notes |
|---|---|---|
| Self-employment (Social Security) | 12.4% | On 92.35% of net earnings, up to $184,500 |
| Self-employment (Medicare) | 2.9% | No cap; 0.9% more above $200,000 ($250,000 filing jointly) |
| Federal income tax | 10%–37% | After the $16,100 standard deduction, half of self-employment tax and the 20% qualified business income deduction |
| State income tax | 0%–13.3% | Depends on the state; see the state guides below |
NIL is a specified service business for the qualified business income deduction, so that deduction shrinks once taxable income passes $201,750 ($403,500 filing jointly) and is gone $75,000 later. Below that it works like it does for any other business.
On $25,000 of NIL income, a single athlete with no other income owes about 16% of it in Texas and 17% in California for 2026. On $100,000 it's about 22% and 27%. Moving that share of every payment into savings as it arrives covers the bill.
| NIL income | Texas (no state tax) | Georgia (flat 4.99%) | California (1%–12.3%) |
|---|---|---|---|
| $10,000 | 14% | 14% | 14% |
| $25,000 | 16% | 18% | 17% |
| $50,000 | 19% | 23% | 21% |
| $100,000 | 22% | 26% | 27% |
Business expenses lower the bill, and other income, such as a job, raises it. Run your own numbers with your state and filing status.
Because nothing is withheld, the IRS expects estimated payments once you'll owe $1,000 or more for the year. For 2026 income they're due April 15, June 15 and September 15, 2026, and January 15, 2027. Paying late or too little adds an underpayment penalty.
| Income earned | Payment due |
|---|---|
| January 1 – March 31, 2026 | April 15, 2026 |
| April 1 – May 31, 2026 | June 15, 2026 |
| June 1 – August 31, 2026 | September 15, 2026 |
| September 1 – December 31, 2026 | January 15, 2027 |
You can deduct expenses that are ordinary and necessary for your NIL work, on Schedule C, which lowers both income tax and self-employment tax. Keep receipts and a note of which deal each one was for.
Personal costs don't count just because you post about them, and the team gear and travel your school pays for aren't yours to deduct.
Product, a car lease, a gym membership or anything else you get in exchange for promotion is income at its fair market value, the same as cash. A brand that sends a $1,500 watch for a post has paid you $1,500.
Non-cash pay also counts toward the $600-per-payer total that makes a deal reportable to NIL Go.
Brands ask for a W-9 with your taxpayer number before they pay. After the year ends, a brand that paid you $2,000 or more sends a 1099-NEC, and a payment app may send a 1099-K once payments pass $20,000 and 200 transactions. You report all NIL income on Schedule C, form or no form.
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don't tax earned income. Every other state does, from flat rates under 3% to California's top 13.3%. Our state guides work through each one with real 2026 brackets and three worked examples.
An appearance in another state can be taxed by that state even if you don't live there, and your home state usually gives a credit for it.
Once NIL is more than a few small deals, a tax professional usually pays for themselves: they'll set up your estimates, catch deductions, and tell you whether an LLC or S corporation makes sense at your income. This guide is general information, not tax advice.