Taxes for NIL

Do I have to file taxes for my NIL deals?

To determine if you need to file taxes and report your income, there are three questions that you need to answer:

  1. Did you receive cash from an NIL deal?
  2. Did you receive a non-cash benefit from an NIL deal?

Examples of non-cash benefits are:

  1. Cars
    1. Merchandise
      1. Free products
      2. Paid travel and expenses by a business partner/sponsor
      3. Social media appearances that help maximize student exposure
  2. Did you receive/make $400 or more from cash and/or non-cash benefits in the last year? 

If you said yes to question 3, then you must file self-employment taxes and report your income.

If you fail to pay required taxes, you can be subject to fines and it could impact your financial aid.

 

How do I file my taxes for my NIL deals?

Step 1: Seek a professional tax expert 

Taxes are complicated and we advise that you seek out a professional tax expert before proceeding to minimize how much you have to pay.

Step 2: You will be issued a Form 1099

The business/partner/brand that you completed an NIL deal with must fill out a Form 1099 for you and send it to you. The information on this form will you help you file your taxes. 

For all deals you complete through the OpenDorse[LH1]  marketplace, you will receive one Form 1099 with your earnings from all NIL deals you did during a calendar year.  You will also receive Form 1099s from other brands if you do any NIL deal outside of the OpenDorse marketplace.

Step 3: Fill out Form W-9

Form W-9 reports your income to the IRS.

Link to W-9: https://www.irs.gov/pub/irs-pdf/fw9.pdf

Step 4: Complete Form 1040 Schedule C 

You must report your income and expenses on Form 1040 Schedule C.

Link to Form 1040 Schedule C: https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Important Note: Filing with multiple states

You may need to file taxes with multiple states depending on where your residence is and where you performed your services for each NIL deal. Seek out a professional tax expert to determine which state(s) you must file taxes in.

 

Tax Preparation Assistance

Volunteer Income Tax Assistance

https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

My Free Taxes

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-%20tax-center

Who Must File Taxes: Oregon 

https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

 

Have more questions?

See our presentation below on taxes for NIL deals for more detailed information.

https://law.uoregon.edu/sites/default/files/2023-05/tax.pdf