In July 2021, a historic change took place in U.S. college sports. For the first time, student-athletes participating in NCAA competitions were permitted to earn income from business ventures related to their name, image, and likeness, commonly referred to as NIL rights. These changes marked a major departure from previous NCAA rules, which had long prohibited college athletes from being compensated for their NIL. A combination of state-level laws and NCAA policy updates eliminated these restrictions, providing student-athletes the freedom to monetize their public image.
However, the implications of this development are more complex for nonresident student-athletes. Thousands of international students on athletic scholarships at U.S. universities now find themselves navigating a legal and regulatory maze. While NIL opportunities open up new financial possibilities, they also present significant risks for international athletes, especially regarding visa compliance and tax obligations. This guide explores the implications of NCAA NIL rule changes and how they affect nonresident athletes studying and competing in the United States.
What NIL Means and How It Has Changed the Landscape
Traditionally, NCAA athletes were barred from accepting any compensation from businesses in return for the use of their name, image, or likeness. This meant that athletes could not appear in advertisements, promotional materials, or video games without jeopardizing their amateur status and eligibility. With the introduction of new NIL rules, this restriction was lifted. Student-athletes can now leverage their athletic reputation and personal brand to generate income in a variety of ways.
These avenues include appearing in advertisements, endorsing products on social media, organizing youth sports camps, teaching lessons, launching businesses, selling memorabilia, and making paid public appearances. Though colleges themselves still cannot directly pay athletes for NIL activities, they are allowed to offer additional educational benefits such as internships or scholarships for graduate programs. The opportunities created by NIL have the potential to be transformative, especially for high-profile athletes, but they also hold value for lesser-known athletes across all divisions.
Understanding NIL Tax Obligations in the United States
One of the most important aspects of NIL income that student-athletes must consider is taxation. All income generated through NIL activities is subject to federal income tax and may also be taxed at the state level, depending on the jurisdiction. The Internal Revenue Service (IRS) requires all individuals earning income in the U.S., regardless of citizenship or residency status, to report it and pay the applicable taxes.
Common NIL income streams include social media sponsorships, endorsements, and paid appearances. For tax purposes, this income is generally considered self-employment income. This means student-athletes may need to file additional forms, calculate self-employment tax, and possibly make quarterly estimated tax payments to remain compliant. Athletes should maintain detailed records of all income and expenses related to NIL activities to properly complete their tax filings.
Income Generation Opportunities Under NIL for Student-Athletes
The scope of NIL opportunities available to student-athletes varies widely based on their visibility and marketability. High-profile athletes may secure national advertising deals or partnerships with major brands. However, all student-athletes, regardless of fame, can explore income-generating activities.
Examples include local business promotions, such as receiving free meals or modest payments in exchange for social media endorsements. Students can host sports clinics, provide private coaching, sell autographed merchandise, and more. The goal of these new policies is to empower student-athletes to benefit from their talents and status in ways that were previously unavailable.
While these opportunities are exciting, athletes must be cautious. Inappropriate NIL agreements or failure to report income correctly can result in penalties, including the loss of eligibility or visa violations for international students.
The Complex Impact of NIL Rule Changes on International Students
International student-athletes represent a significant portion of the NCAA population. For example, nonresidents made up 60 percent of Division I tennis players, 37 percent of men’s soccer players, and 32 percent of women’s golfers as of 2019. These students typically enter the U.S. on F-1 student visas, which come with strict employment restrictions.
While NIL rules make no distinction between domestic and international student-athletes, the visa status of nonresidents presents legal complications. The F-1 visa allows only specific types of off-campus employment, including Curricular Practical Training (CPT), Optional Practical Training (OPT), and STEM OPT extensions. These work options must be related to the student’s academic program and require authorization from the institution before starting any income-generating activity.
Engaging in NIL activities without proper authorization can jeopardize the student’s visa status. If authorities determine that an international student has participated in unauthorized employment, the student may lose their legal immigration status in the U.S.
Institutional Responsibility in Advising Nonresident Athletes
Given the regulatory complexity surrounding NIL income and visa restrictions, schools have a critical role to play in advising international students. Some institutions have adopted a conservative approach, discouraging nonresident athletes from participating in NIL activities altogether. Others may not fully understand the immigration and tax implications involved.
University officials must collaborate with compliance officers and legal departments within their athletics programs to ensure accurate guidance is provided. Miscommunication or a lack of oversight could put students at serious risk. According to international employment and tax specialists at several U.S. institutions, schools must define what constitutes employment under immigration law before advising students.
Seeking clarification from the United States Citizenship and Immigration Services (USCIS) or the Department of State is often advisable when gray areas arise. For example, paid autograph signings, common NIL activities, could be considered employment and thus violate the F-1 visa terms if conducted without proper authorization.
The Importance of Student Responsibility and Due Diligence
While institutions should offer support, student-athletes must also be responsible for their actions. International students must fully understand the terms of their visa and the consequences of noncompliance. Before entering into any NIL agreements, students should consult with their school’s international office, legal counsel, or immigration attorney.
It is important to remember that ignorance of the law is not a valid defense if a visa violation occurs. International athletes should thoroughly vet each opportunity and ask whether it aligns with the authorized types of employment under F-1 or J-1 status. If there is any uncertainty, it is always better to seek guidance before proceeding.
Common Types of Income Permitted for Nonresidents
There are several income types that international students are typically allowed to earn without violating visa terms. These include wages from authorized CPT or OPT employment, academic scholarships, and certain types of prize money. However, each income stream must still be reported to the IRS and is subject to taxation.
Prize money is generally allowed under visa terms and is taxed at a flat 30 percent rate for nonresidents. Yet, the eligibility to accept such prize money depends on the sport and governing regulations. Additionally, royalty income—such as earnings from publishing a book—is often permitted, but only when the student does not actively promote or market the material in a way that would constitute work.
As the NIL environment evolves, these definitions and permissions may change, but for now, nonresidents must navigate a complex landscape with caution.
Differentiating Between Active and Passive Income
Understanding the distinction between active and passive income is vital for international students earning money in the U.S. According to the IRS, active income refers to compensation received in exchange for work. This includes wages, salaries, tips, commissions, and self-employment income. Passive income, on the other hand, is earned without material participation and may include rental income, interest, and royalties.
International students on F or J visas are not allowed to earn active income unless it is authorized CPT or OPT. They are generally allowed to earn passive income, but only when their involvement does not cross into the territory of material participation.
Material participation refers to a taxpayer’s involvement in an income-generating activity in a way that is substantial, continuous, or regular. If a student creates media content or teaches classes with the intent to profit, this could be considered active work—even if the income is categorized as royalties or passive by default. It is the level of participation that matters, not just the income classification.
How the IRS Defines Material Participation
The IRS uses several criteria to determine material participation in an income-producing activity. These include spending more than 500 hours per year on the activity, performing most of the activity themselves, or being significantly involved in multiple activities totaling more than 500 hours. Material participation can also be determined based on historical involvement or the regularity of activity.
If a student is found to have materially participated in producing income, that income may be reclassified as active income. This could lead to a breach of visa regulations if the student was not authorized to work. For this reason, international students must be extremely cautious when engaging in NIL activities or other income opportunities that involve their time and effort.
Earning NIL Income While Outside the United States
Some international students have considered earning NIL income while temporarily located outside the U.S. This strategy may offer a legal workaround since U.S. visa restrictions only apply while the student is physically present in the country. In theory, a student-athlete could perform services for a U.S. company while abroad without violating F-1 visa rules.
However, this arrangement carries its risks. The student must communicate to the company that the services were performed outside the U.S. to avoid the incorrect issuance of tax documents like Form W-2 or 1099. The company must also understand its obligations regarding foreign-sourced income and tax reporting.
Once the student returns to the U.S., they must cease all income-generating activity unless it qualifies under CPT, OPT, or other approved channels. Continued work while in the U.S. could be interpreted as unauthorized employment, regardless of where the income originates.
Sports as a Hobby Versus a Business
A question often raised is whether sports can be classified as a hobby, and whether students can earn income from hobbies under visa rules. While many athletes began their careers as hobbyists, the IRS distinguishes between a hobby and a business based on intent to profit. Income from a hobby must still be reported, but the rules differ from those governing business income.
The IRS uses nine factors to assess whether an activity is a hobby or a business. These include maintaining accurate financial records, the time and effort spent, the expectation of profit, prior success in similar activities, and whether the activity is conducted in a businesslike manner. If the primary motive is not profit, the activity may be treated as a hobby.
Can Student-Athletes Receive NIL Compensation Directly From Their Schools?
Under current NCAA regulations, student-athletes are not permitted to receive direct compensation from their colleges or universities in exchange for their name, image, and likeness. While student-athletes may now enter into agreements with third-party businesses or individuals, NCAA rules still prohibit schools from making direct NIL payments. This stipulation helps maintain the distinction between amateurism and professional status within college athletics.
It is important to note, however, that while NCAA policies prevent direct payments from schools, there is no federal law explicitly forbidding such compensation. In theory, state-level legislation could eventually evolve to allow more direct involvement from educational institutions in NIL deals. If that happens, and NCAA policies change in response, institutions might be allowed to provide NIL payments to student-athletes directly. Until then, nonresident athletes must avoid any arrangements involving direct NIL income from their schools to remain compliant with current guidelines and immigration rules.
Institutional Role in Coordinating NIL Opportunities
Although institutions are prohibited from paying student-athletes directly for NIL rights, they may still play a role in supporting or facilitating opportunities. In some states, colleges are allowed to assist athletes in identifying and evaluating NIL deals, connecting them with outside sponsors, or providing access to educational resources and legal advisors. However, other state laws strictly prohibit institutional involvement in NIL negotiations or deal-making.
It is the responsibility of each college or university to comply with both NCAA rules and applicable state laws. Athletic departments must be extremely careful to ensure that their actions are not interpreted as attempts to compensate athletes or use NIL as a recruiting incentive. Doing so could result in NCAA sanctions or legal challenges.
For international students, the involvement of their schools in NIL opportunities introduces additional concerns. Any perceived arrangement where a school helps facilitate income for a nonresident athlete could raise red flags for immigration authorities. Therefore, institutions must adopt a cautious and well-documented approach when providing guidance or support to nonresident student-athletes.
Limitations and Restrictions on NIL Activities Based on Location
Each U.S. state may impose its regulations that influence the type of NIL activity a student-athlete may pursue. For example, in some jurisdictions, athletes are forbidden from promoting products related to alcohol, tobacco, gambling, or adult content. Other states may restrict the use of institutional logos, branding, or facilities in paid promotional materials. These restrictions apply equally to U.S. citizens and nonresidents.
Furthermore, many schools enforce additional rules that go beyond state legislation. These include limitations on deal types, approval timelines, and reporting requirements. In some cases, athletes may be prohibited from entering into agreements that conflict with existing school sponsorships or team contracts.
Nonresident athletes must understand and adhere to all state and institutional policies regarding NIL. Failure to do so could compromise their visa status and potentially lead to disqualification from NCAA competition. Given the dynamic nature of NIL legislation, students should consult regularly with campus compliance officers and legal advisors to stay informed about applicable rules.
Tax Responsibilities for NIL Income Earned by Nonresident Students
All student-athletes earning NIL income, including international students, are subject to U.S. tax laws. For nonresident aliens, the Internal Revenue Code imposes a flat 30 percent withholding rate on U.S.-sourced income unless a lower rate is specified under an applicable tax treaty. NIL income, being considered self-employment or business income in most cases, is fully taxable and must be reported on federal and possibly state income tax returns.
Nonresidents who receive payments from U.S. businesses will typically be issued a Form 1042-S (for treaty-exempt or withholdable income) or Form 1099-NEC (for nonemployee compensation). These forms provide a summary of income earned and taxes withheld during the year. Nonresident students must use these forms to complete and file a Form 1040-NR, the U.S. Nonresident Alien Income Tax Return.
Because self-employment tax does not apply to nonresident aliens, NIL income is only subject to federal and possibly state income tax. However, students must keep meticulous records of their NIL activities, including contracts, receipts, and expense documentation. This information is critical when filing accurate and complete tax returns.
The Legal Gray Area Surrounding NIL Royalties for Nonresidents
While some NIL income streams are classified as self-employment or independent contractor income, others fall into a legal gray area. Royalties are one such category. For example, a student who licenses their name or image to a video game publisher and receives periodic payments may technically be earning royalties. In some cases, royalties are considered passive income and therefore allowed under F-1 visa rules.
However, the IRS and immigration authorities may determine that royalties connected to NIL agreements involve active participation—such as creating digital content, participating in photo shoots, or promoting the game publicly. If the athlete’s involvement is deemed substantial, the royalty income could be reclassified as active income and therefore considered unauthorized employment for nonresidents.
To avoid potential violations, nonresident student-athletes should consult with legal and tax professionals before accepting royalty payments tied to NIL activities. Understanding the level of effort required and the source of income is critical to remaining compliant with U.S. tax and immigration rules.
Challenges Faced by Schools in Providing Consistent NIL Guidance
Many colleges and universities are still struggling to provide consistent and comprehensive guidance to their nonresident student-athletes regarding NIL participation. The intersection of tax law, immigration law, and NCAA policy creates a highly complex environment where even small errors can have significant consequences.
Institutions that lack in-house expertise on immigration and international tax law may inadvertently provide incorrect or incomplete advice. Some schools have attempted to address this gap by hiring dedicated international tax specialists or collaborating with external legal advisors. Others have opted to restrict or discourage NIL participation altogether for nonresident athletes, choosing a conservative approach until clearer regulatory guidance emerges.
International students attending such institutions may find themselves frustrated by limited opportunities compared to their U.S.-born peers. However, from a legal and institutional risk standpoint, caution is often justified until federal immigration authorities issue definitive rules regarding NIL participation by F and J visa holders.
NIL Income and U.S. Visa Compliance for International Students
The foundation of an international student’s eligibility to remain in the United States is their F-1 or J-1 visa. These visas impose strict limits on the types and timing of income-generating activities. In general, international students may only engage in work that is directly related to their field of study and pre-approved by the institution.
NIL income complicates this framework. Promoting a product or service, making public appearances, signing merchandise, or managing a social media brand are not typically considered academic-related employment. Unless the activity is classified as CPT or OPT and approved by the Designated School Official (DSO), participating in NIL deals may violate the terms of the student’s visa.
If a violation occurs, students risk having their visa revoked, being required to leave the U.S., and facing future immigration barriers. Even well-intentioned students who misunderstand the rules may suffer long-term consequences. Therefore, F and J visa holders must exercise extreme caution and seek prior approval for any NIL-related activities they plan to pursue.
Clarifying the Source of Income and Its Tax Implications
One of the key issues for nonresident student-athletes is determining whether NIL income is U.S.-sourced or foreign-sourced. This determination affects both tax treatment and visa compliance. According to U.S. tax law, income is generally sourced based on where the services are performed. If an international student performs NIL services while abroad, that income may be considered foreign-sourced and thus not subject to U.S. taxation.
However, complications arise when the income is paid by a U.S. entity or involves U.S.-based customers. In such cases, the IRS may still treat the income as U.S.-sourced. Similarly, if the student returns to the U.S. and continues to perform services remotely, the income becomes U.S.-sourced the student’s physical presence in the country.
To avoid confusion and tax penalties, students must carefully document where and when services were performed. They should also communicate clearly with companies to ensure that tax reporting forms reflect the correct source of income. Inaccurate documentation could result in inappropriate tax withholding or even visa issues.
Risks Associated With NIL Participation for Nonresidents
Despite the potential rewards, NIL participation carries significant risks for international student-athletes. The biggest concerns include unauthorized employment, tax noncompliance, and visa violations. These risks are compounded by the lack of clarity in current federal policies and the inconsistent guidance provided by colleges.
Unauthorized employment is one of the most common violations leading to the termination of F-1 or J-1 status. If immigration officials determine that a student has accepted compensation for services that fall outside the scope of authorized employment, the student may be subject to removal from the U.S. and barred from reentry.
Tax compliance presents another major challenge. Nonresident students often have limited knowledge of U.S. tax laws and may fail to file the correct forms or pay the proper amount. Misreporting income or failing to file a return can result in fines, audits, or other penalties.
Given these risks, some experts advise international students to refrain from participating in NIL activities altogether until clearer guidance is available. While this may seem overly cautious, it is often the safest path given the legal uncertainties.
Strategies for Safe NIL Participation Among International Athletes
For international student-athletes who still wish to explore NIL opportunities, several strategies may help reduce legal and tax risks. One approach is to limit NIL activity to periods when the student is temporarily abroad. If services are performed outside the U.S. and documented as foreign-sourced, the risk of visa violation is significantly reduced.
Another strategy is to seek CPT or OPT authorization for NIL activities that can be related to the student’s academic program. For example, a marketing major who engages in NIL branding work may be able to justify the activity as part of their professional training. However, this requires coordination with the school’s international office and proper documentation.
Students should also avoid arrangements that involve direct compensation from their college or that conflict with the school’s sponsorship agreements. Finally, students should retain experienced legal and tax advisors to ensure full compliance with all applicable regulations.
Reporting NIL Income and Understanding IRS Documentation
Nonresident student-athletes who earn NIL income must report this income to the Internal Revenue Service, even if they do not live in the U.S. year-round. The way NIL income is reported and taxed depends on how the income was earned and who paid it. Most commonly, athletes will receive IRS forms such as Form 1099-NEC or Form 1042-S. These forms are issued by businesses or entities that have paid the student for NIL-related services or use of their name, image, or likeness.
Form 1099-NEC is typically used when a student earns nonemployee compensation,, such as money for appearances, endorsements, or freelance work. On the other hand, Form 1042-S is used for payments made to nonresident aliens and may include income types such as scholarships, royalties, or honoraria. Students should retain these forms and report the income on their annual tax return using Form 1040-NR. Failing to file a return or misreporting income can lead to IRS penalties and possible impacts on future immigration applications.
To accurately file their taxes, students may also require an Individual Taxpayer Identification Number (ITIN) or a Social Security Number (SSN). Depending on the circumstances, students may also qualify for tax treaty benefits, which can reduce or eliminate withholding taxes on certain types of income. However, these benefits are not automatic and must be claimed properly on the tax return.
NIL and the Challenge of Visa Enforcement on U.S. Soil
When it comes to enforcing immigration rules, U.S. Citizenship and Immigration Services typically focuses on the physical location of the individual performing the work rather than the location of the paying entity. In other words, if a student-athlete is physically located in the United States while performing services related to NIL—such as filming a promotional video or attending a sponsored event—then that activity is considered to be U.S.-sourced, and visa regulations apply.
This means that even if a foreign business hires a student to perform NIL services, the transaction could still be viewed as unauthorized employment if the student conducts the work while in the U.S. As such, international athletes must be extremely cautious when planning or performing NIL activities during their stay in the country. Engaging in work while in the U.S. without prior authorization is a violation of F-1 or J-1 visa terms, which can result in loss of status or removal proceedings.
Because of this rule, it is not sufficient for students to simply claim they are working for a foreign company. What matters most is where the work takes place. A student could be in violation even if all compensation is paid abroad or to a foreign bank account. If the services are provided on U.S. soil, the work falls under U.S. jurisdiction and must comply with immigration law.
NIL Opportunities While Abroad and Their Legal Implications
While U.S. immigration authorities cannot enforce employment rules outside of the country, the legality of NIL income earned abroad by international students is still nuanced. If an international athlete is temporarily outside the U.S.—during summer or winter break, for instance—they may pursue NIL activities without violating F-1 or J-1 visa rules. Since they are not physically in the United States during the performance of the services, they are not subject to its employment restrictions.
However, students and companies alike must proceed carefully. The student must make it absolutely clear that the services were performed while abroad and not while on U.S. soil. Failure to do so can result in tax documents being incorrectly issued, such as a W-2 or a 1099 for domestic compensation. This could trigger IRS scrutiny or lead to incorrect reporting of U.S.-sourced income.
It is also essential that the student immediately ceaseall employment-related activities upon returning to the U.S. Engaging in any type of NIL activity while physically present in the country without prior authorization could be classified as unauthorized employment. To prevent this, students should document the dates and locations of their work and retain copies of all agreements and communications related to the NIL deal.
The Role of Social Media in NIL and Visa Considerations
Social media is one of the most popular platforms through which student-athletes engage in NIL deals. Athletes may post promotional content, brand partnerships, product reviews, and sponsored messages to their followers. These activities can generate substantial income and play a key role in building an athlete’s brand. However, for international students, participating in such activities raises serious immigration concerns.
When an international student posts a sponsored message or promotes a brand while physically in the U.S., this may be considered work—even if the post itself took only a few minutes to create. Because the student is actively providing a service in exchange for compensation, the activity could be classified as active income and potentially violate F-1 visa restrictions. If a student earns income from social media posts while abroad and can prove the content was created outside the U.S., the risk of violating immigration rules is lower. Still, clear documentation and transparency with sponsors aarerucial to avoid future disputes or immigration issues.
Some students may be tempted to misrepresent their location or try to work around immigration law, but this is extremely risky. The consequences for visa violations can be severe, including loss of status, deportation, or bans on future U.S. entry. International students should consult with their school’s international office or an immigration attorney before pursuing NIL opportunities through social media or any other channel.
Tax Implications of NIL Income Generated Through Social Media
NIL income generated through social media partnerships is typically considered self-employment income by the IRS. This type of income is fully taxable and must be reported even if it was earned from a single transaction. For nonresident students, self-employment tax usually does not apply, but federal income tax and sometimes state income tax still must be paid.
For example, if an athlete promotes a brand through Instagram or TikTok and receives compensation through PayPal, Venmo, or a direct bank deposit, this income must be reported on their tax return. The business that paid the student may issue a Form 1099-NEC, or, in some cases, no form at all. Students are responsible for tracking and reporting this income regardless of whether they receive formal tax documentation.
Some states may also require the student to file a state income tax return if the income was earned while residing there. The rules vary from state to state, but failure to file or underreporting income can lead to penalties and interest. Keeping detailed records of all payments, contracts, receipts, and expenses related to social media NIL deals is essential for tax compliance and financial transparency.
NIL as a Business Activity: Understanding the IRS Business vs. Hobby Test
Another issue that international students must consider is whether their NIL activities constitute a business or a hobby under IRS guidelines. The distinction is important because it determines how income and expenses are reported and whether deductions are allowed. The IRS uses several criteria to evaluate whether an activity is a business or a hobby, including the intent to make a profit, the regularity of operations, and how the activity is conducted.
If a student is consistently generating income through NIL deals, keeping detailed financial records, and investing time and effort into growing their brand, the activity is likely to be classified as a business. In this case, the student must report all income and may be able to deduct certain expenses such as equipment, travel, marketing, or legal fees. However, if the activity is occasional, not pursued with the intent of making a profit, or driven primarily by personal enjoyment, the IRS may treat it as a hobby.
For international students, this classification has immigration implications. A business activity that involves regular service provision may be considered work under U.S. immigration law. Even if the IRS views the activity as a business, it may still violate visa conditions if not properly authorized. Students should approach NIL participation cautiously and ensure they meet both IRS and immigration requirements.
How NIL Income Affects Scholarship Eligibility and Financial Aid
One question frequently raised by international student-athletes is whether earning NIL income will affect their athletic scholarships or other forms of financial aid. In most cases, NIL earnings do not directly reduce scholarship amounts because these deals are separate from school-sponsored funding. However, some institutions may place limits on outside earnings or impose reporting requirements that could influence an athlete’s overall financial aid package.
Additionally, NIL income could potentially affect need-based financial aid eligibility for some students, especially if income is reported on financial aid forms or renewal applications. Although most athletic scholarships are merit-based and not impacted by outside earnings, students need to speak with their school’s financial aid office to understand how NIL participation may affect their award package.
International students should also be mindful of the income limits imposed by their visa status. If the combined value of a scholarship and NIL income exceeds what is allowed under federal immigration law, it could trigger compliance issues or scrutiny from authorities. Schools may also have internal rules governing how much NIL income a student can earn while maintaining eligibility for certain programs or services.
The Future of NIL Legislation and Its Impact on International Athletes
The current NIL environment is still in flux. While state legislatures and the NCAA have taken the lead in establishing NIL rights, federal lawmakers and immigration authorities have not yet provided comprehensive guidance on how these rules apply to international student-athletes. This legal uncertainty creates significant challenges for both students and schools.
There have been calls for national legislation to establish uniform NIL guidelines and clarify how these rights interact with visa laws. Until such laws are passed, international students must continue to operate in a legally ambiguous environment. This lack of clarity may discourage talented athletes from coming to the U.S. or participating in NIL activities, potentially reducing the competitiveness of U.S. collegiate athletics.
Some stakeholders are advocating for new visa categories that would allow international athletes to engage in NIL activities legally. Others support expanding the definition of CPT or OPT to include NIL work if it can be tied to a student’s academic major or professional development. Whether these changes will occur remains uncertain, but growing pressure from universities, athletic associations, and student advocates may eventually lead to more flexible policies.
Ensuring Compliance Through Collaboration and Education
Given the high stakes involved, international student-athletes must collaborate closely with their school’s international office, athletic compliance team, and financial aid office. These professionals can help students understand their rights and responsibilities, identify potential risks, and navigate the complex legal landscape surrounding NIL.
Educational programs and workshops on NIL, immigration compliance, and tax reporting can also empower students to make informed decisions. Schools should invest in training staff members to handle NIL questions and work with experienced legal and tax advisors to support their nonresident population. Creating a transparent, supportive environment will reduce the likelihood of compliance errors and help international students maximize their opportunities without jeopardizing their future.
Hiring Agents and Professional Help for NIL Deals
Student-athletes, including international students, are allowed to hire professional assistance to help manage their NIL opportunities. This can include lawyers, marketing agents, accountants, and tax professionals. These individuals can assist athletes in reviewing contracts, filing taxes, and ensuring compliance with NCAA rules and federal laws. However, specific restrictions apply to the type of assistance allowed under NCAA guidelines.
Agents who help athletes with NIL negotiations must not promise representation for professional sports contracts in the future unless they are certified to do so and it does not conflict with NCAA amateurism rules. For international students, hiring a tax or immigration attorney may be essential in understanding the risks associated with NIL participation and ensuring all income is reported accurately and lawfully. Working with a professional is also advisable for interpreting visa restrictions and assessing whether a particular NIL activity could be classified as unauthorized employment.
Since NIL arrangements can involve complex agreements, such as royalty rights, intellectual property use, and long-term endorsements, professional oversight is strongly encouraged. Student-athletes should be careful to select reputable agents who are experienced in working with international students and who are transparent about their services and fees.
State-Level Reporting Requirements for NIL Agreements
Although the NCAA does not require athletes to report their NIL deals, many U.S. states do have laws mandating disclosure of these agreements to the student’s institution. Typically, these laws require athletes to notify their school within a specific timeframe before or after signing an NIL deal. Some states also require the disclosure of contract details, including the amount of compensation and the nature of services to be provided.
This information helps schools monitor potential conflicts of interest, such as brand sponsorships that may clash with existing institutional agreements. It also allows schools to ensure that student-athletes are complying with applicable laws, NCAA policies, and immigration rules. Nonresident students should work closely with their school’s compliance office to make sure all necessary reporting obligations are met.
Failing to report NIL income as required by state law or school policy may not only affect eligibility but also raise red flags with immigration authorities or the IRS. Students should document all NIL contracts and maintain clear records of when and how deals were executed. Transparency is key to avoiding disputes or sanctions.
How Schools Can Manage Payments to Nonresident Athletes
As long as NCAA rules prohibit schools from directly compensating athletes for NIL-related activity, institutions are not expected to make such payments. However, if rules change in the future and schools decide to exercise their NIL rights, the payment process must comply with U.S. tax law and visa restrictions. Any such payment would likely be treated as self-employment income, independent contractor income, or royalties, depending on the nature of the service.
For nonresident students, payments from their school for NIL activities would require careful consideration. First, the school would need to determine whether the activity qualifies as authorized employment under F-1 or J-1 visa rules. If not, issuing payments could jeopardize the student’s immigration status. Second, the school must properly withhold and report applicable taxes on any payments made to nonresidents, including the standard 30 percent withholding unless a treaty exception applies.
Until schools are allowed to provide direct NIL compensation, their role remains limited to education and oversight. However, should policy changes allow institutional NIL payments, schools will need to build robust compliance systems to manage payments to international athletes and ensure both tax and immigration rules are satisfied.
Future Changes to Visa Policies for NIL Participation
The current visa system does not accommodate NIL participation by international student-athletes. F-1 and J-1 visas are primarily designed for academic study, with limited allowances for on-campus work or training related to the student’s major. As NIL becomes more integral to the college athletic experience, this framework may no longer be sufficient. Advocates have called for updates to immigration law to address the unique position of international athletes and provide legal pathways for them to participate in NIL activities.
One potential solution is the creation of a new visa category specifically for student-athletes engaged in monetizing their name, image, and likeness. This visa could allow limited commercial activity under strict oversight, balancing economic opportunity with immigration control. Another option would be to expand CPT and OPT definitions to include NIL activity if it aligns with the student’s course of study, such as business, marketing, or digital media.
Any such reforms would require collaboration between federal agencies, educational institutions, and the NCAA. Until then, international students must continue to navigate NIL rules under an outdated immigration framework that does not reflect the realities of modern college sports.
Potential Consequences of Noncompliance With NIL and Immigration Laws
Engaging in NIL activity without proper authorization can result in serious consequences for international students. These may include termination of visa status, denial of future immigration benefits, and removal from the United States. Even seemingly minor violations, such as accepting payment for a promotional post without prior approval, can be classified as unauthorized employment under immigration law.
The IRS may also impose penalties for failing to report NIL income or for filing an incorrect tax return. For example, underreporting income or failing to disclose foreign bank accounts can result in fines, audits, and legal proceedings. Because many NIL deals are informal and may not generate formal tax documentation, the burden is on the student to keep accurate records and meet all tax obligations.
Given these risks, it is essential for nonresident athletes to consult legal professionals and remain in close contact with their school’s international office. Proactive communication and a clear understanding of the law can help students avoid unintentional violations and protect their future opportunities in the U.S.
Student Responsibility and Awareness in NIL Dealings
Although schools and government agencies play a role in regulating NIL income, the ultimate responsibility for compliance rests with the student-athlete. Nonresident students must be proactive in understanding the legal, tax, and immigration implications of each NIL opportunity they consider. Ignorance of the law is not a valid defense, and unintentional violations may still carry significant consequences.
Athletes should ask questions before signing a deal, such as whether the income source is U.S.-based, whether the services will be performed on U.S. soil, whether the income will be classified as active or passive, and whether proper visa authorization is required. Students should also ask for written agreements, maintain communication logs with sponsors, and keep receipts or payment records for all income received.
Having a trusted advisor or legal representative is essential, particularly for students who plan to engage in multiple NIL activities. Creating a personal compliance checklist and reviewing it before entering each agreement can help athletes make informed decisions and stay within the bounds of the law.
The Hobby Versus Business Debate in Sports Earnings
Another common question among international students is whether playing sports and earning income through NIL can be considered a hobby rather than a business. The IRS defines a hobby as an activity undertaken for personal enjoyment rather than profit. Sports can certainly begin as hobbies, but once an athlete starts earning money or enters into formal agreements, the line between hobby and business can blur.
To determine whether NIL activity constitutes a business, the IRS examines factors such as whether the student intends to make a profit, keeps financial records, devotes time and effort to the activity, and has prior success in similar ventures. If the activity is deemed a business, then all income must be reported, and tax deductions may be allowed. If classified as a hobby, expenses cannot be deducted beyond income, and the activity is not considered part of a trade or business.
For immigration purposes, whether the activity is a hobby or business makes little difference. If the student provides services and is compensated while in the U.S., it may still be classified as unauthorized employment. Therefore, even hobby-related NIL income should be approached cautiously and with proper legal consultation.
Remaining Competitive While Complying With U.S. Law
One of the most pressing concerns for international student-athletes is the fear of being left behind. As U.S. athletes begin to build their brands and monetize their status, foreign students may feel at a disadvantage due to visa restrictions and a lack of clarity in the law. This may lead some to question whether the U.S. remains the best destination for aspiring athletes who want to compete and earn from their talents.
To remain competitive, schools and regulatory agencies must find ways to balance compliance with opportunity. This includes advocating for clearer immigration guidelines, providing education and support for nonresident athletes, and promoting inclusivity in collegiate athletics. Institutions that value their international student population must take the lead in addressing these issues and supporting their students through the evolving NIL landscape.
International athletes, for their part, must stay informed, work within the law, and use the resources available to them. With careful planning and professional guidance, it is possible to navigate NIL opportunities while maintaining visa compliance and achieving athletic success.
The Path Forward for International NIL Participation
The rise of NIL rights has revolutionized college sports in the United States, opening new doors for student-athletes to monetize their success and build their futures. However, for international students, the path remains complex and fraught with legal uncertainty. Visa rules that were never designed with NIL in mind now create obstacles that make it difficult for foreign athletes to benefit from the same opportunities as their U.S. teammates.
As lawmakers, immigration authorities, and educational institutions continue to evaluate this issue, the hope is that new policies will emerge to provide clearer guidance and expanded access for international students. Until then, nonresident athletes must take extra care in managing NIL income, ensuring tax compliance, and avoiding immigration violations.
The decisions made today will shape the future of international student participation in U.S. college sports. With greater awareness, cooperation, and reform, it is possible to build a system that supports both compliance and opportunity for all student-athletes, regardless of their country of origin.
Conclusion
The introduction of NIL rights has fundamentally changed the landscape of college athletics in the United States, offering new financial opportunities for student-athletes. While these changes have been largely welcomed, they have created unique challenges for nonresident international students. The complexity lies in the intersection of NCAA rules, U.S. tax laws, immigration regulations, and individual state policies — all of which impact whether and how an international student-athlete can benefit from their name, image, and likeness.
Despite being legally permitted under NCAA guidelines, NIL income may not be accessible for many international athletes due to the restrictions tied to F-1 and J-1 visa statuses. These visas do not typically allow self-employment or commercial activity unrelated to a student’s academic field, meaning NIL earnings could be interpreted as unauthorized employment. The risk of violating immigration law is real and potentially severe, including visa revocation or ineligibility for future U.S. entry.