Unpaid taxes are the next wave of NIL complications

The NIL phenomenon remains in the wild west phase. As the dust settles, Uncle Sam will be standing there.

Pointing.

Wanting his cut.

As one source with knowledge of the dynamics of the NIL marketplace recently explained it to PFT, unpaid taxes will be the next big problem for name, image, and likeness payments. Plenty of kids are getting their money and spending it — without paying taxes on it or otherwise setting aside the money to do so.

The tax rates vary from state to state. The federal laws are universal and undeniable. For $1 million, the current federal rate is 37 percent. Which means that, if the payment is made this year, $370,000 will need to be paid to the federal government by April 15, 2025.

Taxes aren’t withheld from these payments, like they are when players get paid by their NFL teams. For NIL payments, young men who in most cases have never paid taxes and in many cases don’t know much if anything about the process will have to figure it out.

Or else Uncle Sam will be doing more than pointing.

The source says it’s happening and it will keep happening, because not enough of the players are getting the information they need when they need it.

The end result will be a massive tax bill. For those who make it to the NFL, there will be money to make it right with the IRS. For those who don’t, it could end up being a problem.