Let the games begin.
There is no doubt that NIL payments represent taxable income. This is already creating "issues" with Pell Grants as those grants require financial disclosure of taxable income in order to get the grant. I am not a Pell expert, but as I understand it, the more income you have, the less Grants that are available . And that also impacts financial support to the university. Apparently a cottage industry of law firms helping schools navigate through these issues has been created.
I already wrote that classifying an athlete as an employee will make the scholarships taxable income. The final proof is that the one bill that forces the schools to treat the athletes as employees includes an amendment to the Internal Revenue to keep the scholarships non taxable; the amendment wouldn't be needed if you thought that employment status wouldn't make it taxable.
There are members in Congress with different views. Schools are currently advising their athletes on scholarship that NIL payments do not affect their scholarships. A bill was submitted last autumn that will make the scholarships taxable if the student has other taxable income that exceeds $20,000.
Sounds like there is a HUGE gap in thinking on this issue.
I don't think either bill is going anywhere, but the issues raised are not going away.
As I wrote elsewhere, the Knight Commission (which the Transformation Committee is working with), strongly supports NIL, but has never supported the "employee" classification.
The Wild Wild West is getting out of hand. We now have high school kids under a contractual obligation to attend a certain school in exchange for a multi-year compensation deal?
Summer will be interesting.
There is no doubt that NIL payments represent taxable income. This is already creating "issues" with Pell Grants as those grants require financial disclosure of taxable income in order to get the grant. I am not a Pell expert, but as I understand it, the more income you have, the less Grants that are available . And that also impacts financial support to the university. Apparently a cottage industry of law firms helping schools navigate through these issues has been created.
I already wrote that classifying an athlete as an employee will make the scholarships taxable income. The final proof is that the one bill that forces the schools to treat the athletes as employees includes an amendment to the Internal Revenue to keep the scholarships non taxable; the amendment wouldn't be needed if you thought that employment status wouldn't make it taxable.
There are members in Congress with different views. Schools are currently advising their athletes on scholarship that NIL payments do not affect their scholarships. A bill was submitted last autumn that will make the scholarships taxable if the student has other taxable income that exceeds $20,000.
Sounds like there is a HUGE gap in thinking on this issue.
I don't think either bill is going anywhere, but the issues raised are not going away.
As I wrote elsewhere, the Knight Commission (which the Transformation Committee is working with), strongly supports NIL, but has never supported the "employee" classification.
The Wild Wild West is getting out of hand. We now have high school kids under a contractual obligation to attend a certain school in exchange for a multi-year compensation deal?
Summer will be interesting.
