So? NIL money now is taxable. They’re 18 or older. You adjust. If any of them ever had a job at McDonald’s as a teenager they had to pay taxes anyway. Of the lame arguments I’ve heard … that’s one of them.
I think this would be a bit different… when working at McD’s they hold out payroll taxes from your check and they don’t have to pay extra at filing time and usually get it all back.
Full ride scholly w/books, room & board and the other bennies that come with it all could add up to serious change that would be a tax burden at filing time I suspect. Not that this would stop NIL deals, which are taxable, but not something to brush off either IMHO.
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I doubt scholarships become taxable. At least not the actual books & tuition part. Room & board might be, but perhaps not. What I’m sure would be taxable is any income above the actual scholarships. After all, scholarships for non-athletes are not taxable. At least not that I’m aware of. Perhaps some portion of them are, but generally not.
NIL is a completely different animal. Remember, NIL’s are not awarded by the schools or the A.D.'s. An NIL deal is theoretically an independent buyer (a booster, sponsor, or businss) giving money to the seller (athlete) in exchange for using his name, image or likeness in some sort of promotion. Now we all know the schools & booster groups coordinate this in one way or another & we all know these “collectives” are set up to give the students as much money as they can, but these are still purchases of the NIL’s for money. The income from them is taxable to the student who gets them, just like money for such a thing is taxable to a professional entertainer. (And they better get good CPA’s or tax lawyers to help them manage these deals or a lot of jocks are gonna find themselves owing a lot of money to the IRS.)
Yes, NIL $ has already been determined to be taxable benefit.
However, athletic scholarships have so far been treated as non-taxable. With intro of NIL & athletes now being employees, athletes may soon be additionally taxed for their college scholarships in return for services they provide to the university.
And if that comes to pass, they will pay taxes just like they are having to do now with NIL. Schools will educate them about that because they don’t want athletes getting nabbed for tax evasion. Just like they’re educating them now about NIL. I don’t have a problem with expecting an 18 year old to pay taxes on his income, whether he works at McDonald’s or for the Ohio State football team.
Simple academic scholarships are non-taxable.
But, if a student receives a “Scholarship for Services”, the student performs work or provides a service for the university. The money or scholarship received in exchange for the services or work performed becomes taxable to the student. Examples are scholarships or student stipends for teaching or research assistants.
If they become employees and the full ride benefits are part of their compensation wouldn’t that be taxable?
Yes. Athletic scholarships may & should now become taxable for same reason that academic scholarships have been taxable when in return for services being performed.
Assume the taxable scholarship benefit would be limited to tuition only but some may argue the benefits should also includes sports training & other athletics related perks.
The difference with athletic scholarships vs NIL $ or McDonalds employee is that the athlete needs to find $ to pay the tax for the scholarship while the $ can be deducted from NIL or McDonalds paycheck. Depending on the school & their cost of tuition, the tax bill could be substantial.
Current pro players aren’t taxed on those kinds of things. Why would college athletes be?
Who knows? It’s all up in the air so to speak.
Pro teams are taxed businesses incurring deductible business costs while universities are tax exempt organizations. Doubtful universities would try to include training costs as part of the cost of the scholarship benefit to the student/athlete, but who knows if that or tax rules change if & when the student/athlete becomes a university employee or contracted non-employee as per the courts?
Getting back to OP, the NOA is a nothingburger only complicated by Coach Khaki being less than honest with the NCAA. If you remember, Bruce Pearl didn’t get a show cause for inviting Aaron Craft to a barbecue, he got it for fibbing about it to the NCAA gumshoes. I doubt they’ll give Harbaugh anywhere near a show cause, probably a few games’ suspension, but it could push him to the NFL anyway. Especially to his old team, the Colts.
Okay. Thanks. I’ll defer to you on that.
My youngest son was on full ride (plus some) academic scholarship. Tuition, books, required supplies, are non taxable. Room, food, anything else, taxable.
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