Protecting Student Athletes from Unexpected Tax Liability Act
Sponsored By: Representative Sewell, Terri A. [D-AL-7]
Introduced
Summary
This bill would create automatic tax withholding on name, image, and likeness (NIL) payments to nonemployee college athletes, using a default 30% holdback. It lets athletes opt out, adds a first-year underpayment penalty waiver, and requires a Treasury report on how the rule works.
Show full summary
- Student athletes: Student athletes would face a default 30% withholding on cash NIL payments and 30% of fair market value for noncash deals. They can elect to stop the withholding and first-year athletes may qualify for a waiver of certain underpayment penalties.
- Payors and schools: Brands, schools, or other payors would be required to withhold 30% as if the payment were wages for withholding purposes. The withholding rule would not change whether an athlete is legally an employee.
- Oversight and review: The Treasury Secretary must report to the House Ways and Means Committee and the Senate Finance Committee by Dec 31, 2029 on costs, whether the 30% rate fits most athletes, payor compliance, and other effects.
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
New 30% withholding for student athletes
This bill would treat any name, image, and likeness (NIL) payment to a student athlete as if it were wages for income tax withholding. It would require payors to withhold 30% of cash NIL payments and 30% of the fair market value of non-cash NIL items on the transfer date. A payee could elect out of the withholding, and withholding would not change whether someone is an employee for other tax rules. The rule would apply for tax years beginning after December 31, 2027, and the bill would also waive the usual underpayment addition to tax for a student athlete for a taxable year once if the Secretary determines the NIL withholding rule applies and the waiver was not used before.
Sponsors & CoSponsors
Sponsor
Sewell, Terri A. [D-AL-7]
AL • D
Cosponsors
Rep. Davis, Danny K. [D-IL-7]
IL • D
Sponsored 9/2/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov