Protecting Student Athletes from Unexpected Tax Liability Act

The Protecting Student Athletes from Unexpected Tax Liability Act requires companies to withhold 30 percent of income tax from payments made for a student athlete's name, image, and likeness. This rule treats these specific commercial payments as if they were standard wages, even though the athletes are not classified as employees. The bill also waives penalties for underpaid taxes in the first year a student athlete is subject to this new withholding requirement. To ensure the policy works effectively, the Treasury Department must report to Congress by 2029 on whether the 30 percent rate is appropriate and how well companies are complying with the law.