McGuireWoods Chicago partner Sarah Wake and Dallas associate
Addison Fontein co-authored an article titled “NCAA Athletes Will Need a New Playbook to Score on Tax Day,” published by Bloomberg’s Daily Tax Report on April 26, 2022.
In the article, the authors reviewed a brief history of National Collegiate
Athletic Association rules that previously barred athletes from profiting
from their name, image and likeness (NIL). Changes to state laws now enable
college athletes to receive compensation for NIL deals with major companies
The authors cautioned that those deals, which may include social media
partnerships, “likely presented a new set of considerations for student
athletes” who qualify as independent contractors subject to self-employment
The article detailed lesser-known tax repercussions of collecting NIL
revenue, including tax considerations for noncash deals, implications of
operating as a sole proprietorship or a limited-liability company,
reporting requirements, and the potential impact on students’ eligibility
to receive grants as well as their parents’ tax filings.
“While NIL was a welcomed change for many, its quick and unregulated
implementation is sure to present unwelcome surprises to some student
athletes,” the authors concluded.
Wake, a labor and employment partner, previously served as associate
general counsel and interim associate vice president for equity at
Northwestern University and is a former member of the NCAA Division I
Committee on Infractions.
Fontein, a complex commercial litigator, previously wrote about tax
implications for professional athletes in the
Sports & Entertainment Journal published by the Arizona State University Sandra Day O’Connor College of