When a collective, a brand, or a camp pays you for your name, image, and likeness, they are not hiring you as an employee. There is no W-2, no withholding, and no employer paying half of your Social Security and Medicare. In the eyes of the IRS, you are running a small business, and NIL money is that business's revenue.
Schedule C is where NIL deals land
Self-employment income gets reported on Schedule C, a form attached to your regular Form 1040. On it, you list everything you were paid: nil deal income, collective payments, appearance fees, camp money, and the fair market value of free products you received in exchange for promotion. Then you subtract the costs of earning that money, things like agent fees, travel to appearances, and equipment you bought for content. The result is your net profit, and that is the number the IRS actually taxes.
This is genuinely better than it sounds. Employees cannot deduct work expenses on their federal return, but a self-employed NIL athlete can. Every legitimate expense you track lowers both your income tax and your self-employment tax.
Schedule SE and the tax employees never see
Alongside Schedule C, you file Schedule SE, which calculates self-employment tax: 15.3% of your net profit, covering Social Security and Medicare. If you have ever had a campus job, this is the FICA line on your pay stub, except an employer paid half of it for you. As a self-employed athlete you pay both halves, though you deduct half of the tax itself on your Form 1040 as a partial offset.
Schedule SE kicks in once net self-employment earnings pass $400 for the year. That threshold is low on purpose: even a single $500 appearance fee can create a filing requirement, whether or not anyone sent you a tax form for it.
The rare cases that are not self-employment
Almost all NIL money is self-employment income, but there are edge cases. If a business actually hires you as a W-2 employee, with withholding and a regular wage for real work, those wages are employment income, not Schedule C income. A true no-strings gift with nothing promised in return is not income at all, but the moment a post, an appearance, or the use of your name is expected, it is compensation. Prize money and awards are taxable too, though they may land as other income rather than self-employment income depending on the circumstances.
If a payer sends you a 1099-NEC, they have told the IRS they paid you as a contractor, and the IRS will expect to see that amount flow through Schedule C. When your situation does not fit the normal pattern, sort it out before filing rather than guessing, because self-employment tax is the single biggest line most NIL athletes get wrong.