No... it's "financial aid" ... as long as they remain "student athletes" and are not classified as "employees" (see the Northwestern NLRB case)
It may be treated as financial aid but it WILL be taxed.
The university will be able to withhold the taxable portion of the stipend to assist the athletes if they choose to do so.
I'm not sure how you think it won't be taxable, "but I could be wrong(in Carmin's voice)".
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It might be reportable but unless these kids have significant reportable income coming in from somewhere else (which the vast majority of them do not) it would probably be below the taxable threshold.
This could get messy with tax implications and if it's NOT treated as taxable income, I see the government wanting a piece of the pie.
Let's see, the Feds already take what they call an "Origination Fee" on Federal Loans such as Stafford Loans and do absolutely nothing but pass the debt along to a loan servicer such as Nelnet.
You can bet they will want a chunk of this extra money.
Just my thoughts working within higher education.
Since $4500 is below the individual deduction... even if the income is listed as taxable, since these players will be earning almost no other income, chances are they pretty good they will not be having to actually pay taxes.
Agreed, but your original statement was that the stipend would NOT be taxable.
I think we have all come to agree that there will be little tax(if any) paid on the income.