Sports & NIL

Short answer: The athlete does. Revenue share payments from a school to an athlete are taxable income to the athlete, generally reported on a Form 1099, and may be subject to self-employment tax depending on how the relationship is structured.

House-settlement revenue share is paid by the university directly to the athlete and is not a scholarship. It is taxable as ordinary income. Most schools are issuing Forms 1099-NEC, treating the athlete as an independent contractor — which means the athlete also owes self-employment tax.

A small number of structures (and some pending legislative proposals) would reclassify these payments as W-2 employee compensation, shifting half of the SE-tax burden to the school. Until then, athletes receiving revenue share should plan to set aside roughly 30–35% of each payment for federal, state, and self-employment taxes, and should make quarterly estimated payments to avoid underpayment penalties.

Related deep-dives

• NIL revenue share guide