HouseH.R. 10236119th Congress
To amend the Internal Revenue Code of 1986 to require income tax withholding at the source for name, image, and likeness payments to independent contractors who are student athletes.
Full Text
Official text as published. Use Ctrl+F / Cmd+F to search within the document.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10236 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 10236
To amend the Internal Revenue Code of 1986 to require income tax
withholding at the source for name, image, and likeness payments to
independent contractors who are student athletes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 2, 2026
Ms. Sewell (for herself and Mr. Davis of Illinois) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to require income tax
withholding at the source for name, image, and likeness payments to
independent contractors who are student athletes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Student Athletes from
Unexpected Tax Liability Act''.
SEC. 2. COLLECTION OF INCOME TAX AT SOURCE FOR NAME, IMAGE, AND
LIKENESS PAYMENTS TO STUDENT ATHLETES.
(a) In General.--Section 3402 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(u) Extension of Withholding to Certain Payments to Student
Athletes Classified as Not Employees.--
``(1) In general.--For purposes of this chapter and so much
of subtitle F as relates to this chapter, any name, image, and
likeness payment to a student athlete shall be treated as if it
were a payment of wages by an employer to an employee.
``(2) Amount withheld.--
``(A) In general.--The amount to be deducted and
withheld under this chapter from any payment to which
paragraph (1) applies shall be an amount equal to 30
percent of the amount of such payment.
``(B) Non-cash remuneration.--In the case of
remuneration other than cash, the amount to be withheld
under this chapter shall be an amount equal to 30
percent of the fair market value of such remuneration
on the date of transfer from the payor to the payee.
``(3) Name, image, and likeness payment.--The term `name,
image, and likeness payment' means remuneration to a student
athlete in cash, property, or services for the commercial use
of such student's name, image, or likeness.
``(4) Definitions.--For purposes of this subsection--
``(A) Student athlete.--The term `student athlete'
means an individual who is enrolled as a full-time
student at an institution and who--
``(i) makes satisfactory progress towards
completing a degree, and
``(ii) participates in intercollegiate
athletic competition or competes for a varsity
sports team as part of the institution's
educational, developmental, or extracurricular
programs.
``(B) Institution.--The term `institution' has the
meaning given the term `institution of higher
education' under section 101 of the Higher Education
Act of 1965.
``(5) Worker classification.--Withholding under this
subsection shall not be taken into account in determining
whether the payor or payee of a name, image and likeness
payment is an employee or an employer for purposes of this
title.
``(6) Exception.--A payee may elect to have paragraph (1)
not apply, and such election shall remain in effect until the
taxpayer terminates such election.
``(7) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out this subsection.''.
(b) Waiver of Underpayment Penalty for New Student Athletes.--
Section 6654(e) of such Code is amended by adding at the end the
following new paragraph:
``(4) New student athletes.--No addition to tax shall be
imposed under subsection (a) with respect to any underpayment
if the Secretary determines--
``(A) that the taxpayer is a student athlete with
respect to whom section 3402(u) applies for the taxable
year, and
``(B) that the addition to tax was not waived under
this paragraph with respect to the taxpayer for any
prior taxable year.''.
(c) Effective Date.--The amendment made by this section shall apply
to payments made in taxable years beginning after December 31, 2027.
SEC. 3. IRS REPORT.
(a) In General.--Not later than December 31, 2029, the Secretary
shall report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate on the
effects of the extension of withholding to payments to student athletes
under section 3402(u) of the Internal Revenue Code of 1986 (as added by
section 1), based on the most recent data that is available.
(b) Contents.--The report described in subsection (a) shall
include--
(1) the results of a study on the costs and benefits
relating to automatic withholding on the behalf of student
athletes,
(2) whether the 30 percent withholding rate was beneficial
or accurate for the needs of most student athletes,
(3) the rate of payor compliance with the provisions of
section 3402(u) of such Code (as so added), and
(4) such other information as the Secretary determines is
relevant.
(c) Secretary.--For purposes of this section, the term
``Secretary'' means the Secretary of the Treasury (or the Secretary's
delegate).
<all>