Key insights
- If you make money from NIL deals in different states — like paid appearances, events, or sponsorships — you might need to file taxes in each place you work, not just your home state.
- Tracking where you travel and what you do for each NIL deal makes tax time much easier. Write down dates, locations, and what you did for every paid event or activity.
- Talking to a tax advisor before you start earning in multiple states can save you time and stress later. They can help you figure out what you need to file and when.
Learn how to keep more of your college athlete NIL income.
Name, image, and likeness (NIL) deals have transformed college athletics, creating new income opportunities for student-athletes. But with this new revenue stream comes a complex tax landscape — especially when it comes to the “jock tax.”
Traditionally applied to professional athletes, this concept now affects college athletes who earn NIL income across multiple states.
What is the jock tax?
The “jock tax” refers to state and local income taxes imposed on nonresident athletes who earn income while performing services in a state. For professional athletes, this means paying taxes in every state where they play games. For college athletes, NIL deals can trigger similar obligations if:
- You attend paid appearances or events in other states
- You perform NIL-related activities outside your home state (e.g., photo shoots, autograph sessions, promotional events)
How NIL income differs from professional athlete compensation
Professional athletes are paid to play their sport; however, college athletes are paid for use of their name, image and likeness. College athletes are not employees of their school, but rather are treated as independent contractors.
Professional athletes typically earn salaries from their teams, and states allocate that income based on “duty days” — the number of days an athlete works in a state during the season. College athletes earning NIL income, however, are generally paid for specific services such as appearances, autograph signings, or promotional events, or paid royalties for use of their NIL in promotional material. Review the specifics of your NIL contract to determine what services the contract includes.
Why this matters
- NIL income allocation is based on where the service occurs, not on a season-long schedule.
- A single NIL event in another state can trigger a filing obligation, even if most NIL activities are done at home.
How NIL income is taxed across states
Residency rules
- Home state tax — Your resident state taxes all income, regardless of where it’s earned.
- Nonresident state tax — States where you perform NIL-related activities may tax income earned there.
- Credits for taxes paid — Most states offer a credit for taxes paid to other states, reducing double taxation — but only if you file correctly.
Common NIL scenarios
- Social media deals — If all work is done in your dorm room in your home state, only your resident state taxes the income.
- In-person appearances — Traveling to another state for a paid event means that state can tax the portion of income earned there.
- Multi-state activities — Athletes with national sponsorships and appearances in multiple states may face filing obligations in several jurisdictions.
Examples of high-tax states where jock tax applies
While enforcement varies, athletes should pay attention to states with high income tax rates, as these can significantly impact NIL earnings:
- California: Up to 13.3%
- Hawaii: Up to 11%
- New York: Up to 10.9%
- New Jersey: Up to 10.75%
- Oregon: Up to 9.9%
- Minnesota: Up to 9.85%
- Local taxes can also apply in cities like Philadelphia and Cleveland, adding another layer of complexity. Some cities with an income tax, like New York or Washington, DC, have a local income tax but the local income tax only applies to city residents. Work with a professional who knows the rules and can advise accordingly on various state and local tax jurisdictions.
States without income tax
States like Florida, Texas, Nevada, Tennessee, and Washington don’t impose personal income tax. However, appearances in other states still create obligations — even if your home state has no income tax.
If your NIL deals involve appearances or work outside your home state, expect to file in multiple states and cities. The “jock tax” applies based on where services are performed — not where the contract is signed. Accurate tracking and proactive planning are essential.
Compliance tips for college athletes
- Track where you work — Keep detailed records of appearances, events, and travel dates.
- Allocate income — Break down NIL payments by state based on where services were performed.
- Plan ahead — Work with a tax advisor to estimate multi-state obligations and avoid surprises.
- Consider entity structure — An LLC or S corporation won’t eliminate state filing requirements, but may simplify accounting, save taxes in certain cases, and may allow for pass-through entity tax (PTET) elections, which can be a useful tool to maximize the federal deduction for state taxes paid in certain cases.
How CLA can help with state and local taxes on NIL income
Failing to comply with state and local tax rules can lead to penalties, interest, and even audits. For athletes with multiple NIL deals, the complexity grows quickly.
CLA offers practical support for college athletes earning NIL income across state lines. With guidance on tracking appearances, breaking down payments, and understanding filing requirements, you can approach tax season with confidence and clarity.