{"id":62892,"date":"2023-06-14T15:32:43","date_gmt":"2023-06-14T20:32:43","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=62892"},"modified":"2023-06-14T15:32:43","modified_gmt":"2023-06-14T20:32:43","slug":"nil-collective-contributions-taxes","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/income\/nil-collective-contributions-taxes\/","title":{"rendered":"Giving money to an NIL collective? Heads up: It may not be a tax write off"},"content":{"rendered":"\n

The world of college sports changed dramatically in 2021 when new NCAA rules around Name, Image, and Likeness (NIL) deals came into play. Since the change, college athletes can make money a variety of ways, such as endorsement deals and sponsorships.<\/p>\n\n\n

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The new rule has also given rise to NIL collectives, a way for fans to financially support their favorite college athletes like never before. These organizations have sprung up across the country allowing boosters to pool their money, which is then distributed to one or more players.<\/p>\n\n\n\n

As individuals and business pay into the collective, they may think they\u2019re getting a tax write off. However, the IRS clarified<\/a> recently that some NIL collectives will not be considered a nonprofit having 501(c)(3) status.<\/p>\n\n\n\n

NIL collective payments may not be charitable contributions<\/h2>\n\n\n\n

So, where is the confusion coming from? It all has to do with whether the collective is tax exempt or not. If the NIL collective does not have 501(c)(3) status, then any contributions you make will not be tax deductible on the federal level.  <\/p>\n\n\n\n

If the NIL collective does not have 501(c)(3) status, then any money you\u2019ve given to the collective is just a payment \u2013 not a charitable contribution or tax-deductible donation. On the state level, there are some states that will allow NIL collective payments to be treated as tax exempt.<\/p>\n\n\n\n

What should you do if you\u2019ve paid into an NIL collective?<\/h2>\n\n\n\n

Paying money into a collective can be a great way to support the college athletes you love. But, if you\u2019re expecting to get a break on your taxes next year, you\u2019ll want to ensure the following:<\/p>\n\n\n\n