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.

Terri A. Sewell

Democrat · AL · Representative

Source: Congress.gov · FEC

• Danny K. Davis (D-IL-7)Original· 2026-09-02

Referred to the House Committee on Ways and Means.

2026-09-02

Source: Congress.gov

Plain-English summary pending. Introduced on 2026-09-02. Check back soon — summaries are generated as bills progress through Congress.

[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>

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