The top 25 college football stars for the 2026 season are projected to earn a combined $88.5 million from name, image, and likeness (NIL) deals, but they face hefty tax bills that cut significantly into their earnings. Miami Hurricanes quarterback Darian Mensah leads the pack, overtaking last year’s top earner, Texas quarterback Arch Manning. These athletes are classified as independent contractors for tax purposes, meaning their NIL income is subject to federal, state, and local taxes, plus a 15.3% self-employment tax covering Social Security and Medicare, which drastically reduces their take-home pay.

State income tax rates, which range from 0% to 13.3%, play a crucial role in determining how much these athletes ultimately keep. Players in states without income taxes, like Texas and Florida, have effective tax rates around 36-37%, whereas athletes in high-tax states such as California or Oregon can see nearly half their income go toward taxes. For example, Oregon’s Dante Moore and California’s Jaron-Keawe Sagapolutele face effective tax rates close to 47%-49%, while similarly valued athletes in no-tax states retain far more of their NIL income. Additionally, some players face county or city taxes, further increasing their tax burden depending on their school’s location.

The IRS requires NIL income to be reported on a calendar year basis, not aligned with the academic year, complicating the tax situation for athletes who might receive payments for deals related to separate seasons or transfer portals. This means that income earned in one school year can be taxed in a different calendar year, making it essential for athletes to diligently track payments and expenses quarterly. They are also allowed to deduct reasonable business expenses such as agent fees, marketing costs, and travel, typically estimated at around 5% of their NIL revenue.

States are increasingly responding to these tax disparities by considering legislation to exempt NIL income from state taxes to attract top talent. Arkansas was the first to make NIL earnings tax-exempt, while Mississippi, Alabama, Georgia, and others have proposed similar bills, although most have stalled. This growing tax competition highlights how a player's location now significantly impacts their net earnings, making state tax policy a strategic factor in recruiting and NIL deal structuring for college football stars.