U.S. Rep. Terri Sewell Introduces Bill to Withhold Taxes from College NIL Earnings
U.S. Rep. Terri Sewell has introduced the Protecting Student-Athletes from Unexpected Tax Liability Act. This proposed legislation aims to address the tax obligations of college athletes earning income through Name, Image, and Likeness (NIL) agreements. The bill mandates that a portion of NIL payouts be withheld for federal tax purposes. Sewell stated that the initiative is designed to protect young athletes from unforeseen tax burdens and penalties, citing instances where athletes, unaware of their tax responsibilities, faced significant bills from the IRS after spending their NIL earnings. She highlighted a case where an 18-year-old athlete incurred a $320,000 tax bill on $750,000 in NIL income due to a lack of understanding regarding tax obligations and estimated quarterly payments. The legislation seeks to provide these athletes with the necessary tools and protections for a stable financial future.
