PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
No official summary is available in the imported record yet.
People & committees
Rep. Sewell, Terri A. [D-AL-7] · D–AL
Legislative record
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Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: Sep 22, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2026-09-02 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed Protecting Student Athletes from Unexpected Tax Liability Act would generally require 30% tax withholding on payments for commercial use of qualifying student athletes’ names, images, or likenesses, including noncash compensation. Athletes could opt out of this withholding. The bill would also provide qualifying athletes relief from an underpayment penalty if they had not previously received that waiver, and require a Treasury report on the withholding system.
This Act may be cited as the Protecting Student Athletes from Unexpected Tax Liability Act.
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.
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.
A payee may elect to have paragraph (1) not apply, and such election shall remain in effect until the taxpayer terminates such election.
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.
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
For the specified tax-withholding rules and related tax administration, the bill would treat covered payments as wages paid by an employer to an employee. Covered payments would include cash, property, or services exchanged for commercial use of the athlete’s name, image, or likeness.
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.
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.
An athlete would qualify only if enrolled full time, making satisfactory progress toward a degree, and participating in intercollegiate competition or competing for a varsity team within the institution’s programs. Eligible institutions would be defined by a cross-reference to section 101 of the Higher Education Act of 1965.
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.
The term institution has the meaning given the term institution of higher education under section 101 of the Higher Education Act of 1965.
The required withholding—tax deducted from a payment—would be 30% of the payment. For noncash compensation, it would be 30% of its fair market value on the date it passes from the payer to the recipient.
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.
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.
A payment recipient could opt out of the proposed wage treatment for withholding purposes. That choice would remain effective until the taxpayer ended it; the text sets no automatic expiration.
A payee may elect to have paragraph (1) not apply, and such election shall remain in effect until the taxpayer terminates such election.
Withholding under the new rule could not be considered when deciding whether the payer or recipient is an employer or employee for purposes of the Internal Revenue Code.
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.
The bill would waive the underpayment penalty addressed by section 6654(a) when the Secretary determines that the athlete is covered by the new withholding provision for that tax year and has never received this particular waiver for a previous tax year. The proposed language refers to any underpayment, without expressly limiting relief to underpayments from name, image, or likeness income.
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.
The Secretary would be required to issue regulations or other guidance as necessary or appropriate to implement the new withholding subsection.
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out this subsection.
Section 2 specifies that its amendment would apply to payments made in tax years beginning after December 31, 2027.
The amendment made by this section shall apply to payments made in taxable years beginning after December 31, 2027.
By December 31, 2029, the Treasury Secretary or a delegate would have to report on the withholding system’s effects to the House Ways and Means Committee and the Senate Finance Committee, using the most recent available data.
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.
For purposes of this section, the term Secretary means the Secretary of the Treasury (or the Secretary’s delegate).
The report would have to examine withholding costs and benefits, whether the 30% rate suited most athletes’ needs, and how often payers complied. It could also include other information the Secretary considered relevant. These are questions for study, not established benefits of the proposal.
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.
The supplied official-actions snapshot, updated September 22, 2026, records introduction in the House and referral to the House Committee on Ways and Means on September 2, 2026. It does not establish subsequent legislative action or enactment.
Source snapshot updated 2026-09-22T15:26:45Z. 2026-09-02: Referred to the House Committee on Ways and Means. 2026-09-02: Introduced in House
A closer look
Reviewed version: Introduced in House · 2026-09-02. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy rider was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish the contents or attachment history of other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion is limited to that version; formal earmark disclosures and accompanying materials were not supplied.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
The supplied text contains a limited tax-penalty exception tied to the bill’s main policy. Identifying that exception is not a judgment about its merits.
Student athletes covered by the new withholding provision could receive an underpayment-penalty waiver unavailable under this new paragraph to other taxpayers. Eligibility requires the Secretary’s determination and no waiver under the same paragraph for a prior tax year. This is a targeted exception accompanying the withholding policy; its wording covers any underpayment rather than expressly restricting relief to name, image, or likeness income.
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.
Full text preserved for this analysis. Legislative record snapshot: Sep 22, 2026. How PlainBill uses AI