Core rule: Most NIL payments to student-athletes are business income to the athlete (independent contractor/sole prop). Payers typically issue Form 1099-NEC at $600+ per year unless a payment platform issues 1099-K for that same stream. Student status (HS or college) doesn’t change federal info-reporting.
When to use 1099-NEC
Use 1099-NEC (Box 1) for fees paid directly to the athlete for posts, appearances, signings, camps, or promo work.
When 1099-K may apply
If a platform or payment app settles card/app sales or tips to the athlete, that platform may issue a 1099-K instead.
Do not also issue a 1099-NEC for the same platform-processed amounts.
What payers should collect
Get a W-9 from U.S. athletes or a W-8 from non-U.S. athletes before you pay. Track cash and noncash perks (gear, gift cards) at fair market value.
Minors (high-school athletes)
Minors can get 1099s. Use the athlete’s SSN/ITIN. Income is still the athlete’s, even if a parent helps manage it.
If the athlete is an employee (rare)
If the deal is true employment, pay through payroll and issue a W-2. School jobs (like work-study) are separate from NIL.
Non-U.S. athletes
For services done in the U.S., collect W-8BEN, check any tax treaty with Form 8233, and if no relief applies, withhold and report on 1042-S.
What athletes should do
Report NIL income on Schedule C. Deduct normal business costs (agent fees, gear for content, travel tied to the job). If net profit > $400, expect self-employment tax in addition to income tax.