re: Breaking News: NCAA to allow players to be paid for names, images, likeness

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The IRS haven’t thought about that part good point. Government is going to get there share.

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Oh yes the IRS has and are waiting for this to happen. Some players and their families might not like this with the new law in place since this will now all fall under taxable unearned income.

First look at scholarship alone as the athletes are receiving taxable income. Anything that pays for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution is not taxable but amounts used for incidental expenses, such as room and board, travel, and optional equipment has to be reported for gross income.

Now the concern with that currently is how kiddie tax is applied(students under the age of 24) which would be taxed as unearned income at the family rate if under $2100 but IIRC(new law in place this year) the new changes for anything taxable income which stipends and scholarship portions over 12+ got moved to a trust income tax rate of 37% which means getting paid for these likeness in the end they will get very little of it.

This is only the federal tax rate. College athletes in CA would be subject to an additional 13% tax. Other states will do the same as well. 50% is better then nothing but for athletes who for the majority are still claimed as dependents under their parents for tax purposes this could be a mess. Especially for other benefits for medical and what which will change household income amounts.