What do NIL college football players pay in taxes?
As the college football season starts, athletes face taxes on their name, image and likeness income.
How State Taxes Impact NIL Football Earnings
As college football begins this week, athletes face income taxes on name, image and likeness (NIL) income. How much they’ll pay will vary by state.
Athletes must report NIL earnings as taxable income to the IRS. States with no income tax, such as Florida and Texas, have an advantage in attracting players, and last year Arkansas enacted a law exempting college athletes from the state’s flat income tax on NIL money they get directly from universities.
For a college football player who’s on an AP Top 25 team and makes $1 million this year in NIL income, here is an estimate of his state taxes assuming, he’s a single filer, according to FinanceBuzz:
The differences facing college athletes illustrate a broader competition among states. Where people choose to live and work can affect how much of their earnings they keep.
The Illinois Tax Penalty and Outmigration
Illinois has one advantage in that competition: its constitutionally protected flat income tax provides taxpayers stability and predictability. But at 4.95%, the state’s rate is higher than those in most other flat-tax states, and Illinois families and businesses face some of the nation’s highest state and local tax burdens.
More than half of Illinois voters identified high taxes as one of the state’s top two issues in a recent poll by M3 Strategies for the Illinois Policy Institute. Just over half said they would leave Illinois if given the opportunity, and among those who would leave, nearly 69% cited high taxes as one of their top two reasons.
Many are leaving. Nearly 83,000 Illinois residents moved to other states in 2024, and 95% went to states with lower state and local tax burdens.
College football provides a high-profile example of competition between states with different tax burdens. While preserving the predictability of its flat income tax, Illinois can cut the tax burden on families and businesses — giving them less reason to leave.
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