With new Name, Image, and Likeness legislation taking effect this tax year, the South Carolina Department of Revenue (SCDOR) knows that many collegiate student-athletes are filing an Individual Income Tax return for the first time this year. That’s why the SCDOR has compiled tips to help student-athletes navigate the tax implications of the new NIL legislation, along with filing guidance to help all students who attend a South Carolina college or university and South Carolina residents attending an out-of-state college.
General guidance for college students
You may need to file a tax return depending on your gross income and whether your parents can claim you as a dependent. Use the IRS’s Interactive Tax Assistant to find out if you need to file a tax return and if you can be claimed as a dependent. If you are required to file a federal return with the IRS, you are generally required to file a state return as well.
College can often take residential students across state lines, which impacts your tax obligations if you earned income at any point during the year. Most students will find themselves in one of three categories:
- South Carolina residents attending college in another state must file an SC Individual Income Tax return that includes all of their 2021 income, including income earned in another state. When filing their return, they can claim a credit for taxes paid to another state on the SC1040TC Worksheet if filing by paper, or the tax credits section of their electronic return.
- Out-of-state residents attending a South Carolina college must file an SC Individual Income Tax return that includes all income earned in South Carolina, if applicable. These students are encouraged to check with the state of their residency to get credit for taxes paid to South Carolina.
- South Carolina residents attending an in-state college should file an SC Individual Income Tax return like any other South Carolina taxpayer.
Guidance for student-athletes with Name, Image, and Likeness (NIL) income
The 2021 tax year is the first year college student-athletes could receive income based on their NIL while maintaining their NCAA or NAIA eligibility. This new income opportunity for college student-athletes is NOT a change in South Carolina tax law or policy. So, the same policies apply to all South Carolina taxpayers who receive income from NIL (oftentimes called endorsements), regardless of whether or not they are a college student or a college student-athlete.
Anyone who earns income through NIL or endorsement deals should take note of the following guidance:
- Taxpayers who receive income from NIL should receive a 1099 from each business where they earn income. Even if you do not receive a 1099, you should report all income you earned on your return.
- Income earned in South Carolina must be reported on the SC Individual Income Tax return, regardless of the taxpayer’s state of residency. Out-of-state residents should see the applicable section above for tips on receiving credit for taxes paid to South Carolina.
- For tax purposes, income includes gifts (such as gear) and services the taxpayer received as compensation, not just money.
All college students should learn more about the Tuition Tax Credit
Qualifying students attending a South Carolina college or university can receive a credit up to 50% of tuition paid, limited to $1,500. Visit dor.sc.gov/taxcredits to learn more about eligibility requirements. If you’re eligible, use the 2021 Tuition Tax Credit form (I-319) to claim the credit if filing by paper, or the tax credits section of your electronic return.
Individual Income Tax returns are due April 18. File your return online and choose direct deposit for your refund as the fastest, safest, and easiest options. For more tips and information about filing Individual Income Tax Returns, visit dor.sc.gov/iit.
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