In-Kind Payment
An in-kind payment is compensation in something other than money, products, equipment, services, travel, use of a vehicle. In-kind NIL compensation is permitted and common, but it is still compensation: it must be disclosed, it is valued at fair market value, and it is taxable.
Q. Does an in-kind deal have to be disclosed?
Yes. The $600 NIL Go threshold is based on value, not on whether cash changed hands. A product deal worth more than $600 is reportable.
Q. How is it valued?
At fair market value, what the goods or services would cost the athlete to buy. That figure is what gets reported and what gets taxed.
Q. Is it taxable?
Yes, and this is where athletes most often get caught out. Receiving $10,000 in product creates a tax liability with no cash attached to pay it.
Q. When is an in-kind benefit not permissible?
When it comes from the school or an associated party outside an authorized channel and is not available to other students. That is an extra benefit, regardless of whether it was called a payment.
