HUSTLE Act

Bill Number

H.R. 9568

Origin Chamber

House

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-06-30: Referred to the House Committee on Ways and Means.

Last Updated

2026-07-07T05:08:21Z

AI-Generated Summary

Purpose This legislation amends the Internal Revenue Code of 1986 to create tax-advantaged NIL investment accounts for eligible student-athletes. Its goal is to allow student-athletes to contribute income earned from the use of their name, image, or likeness into accounts that receive favorable tax treatment, with distributions generally taxed more favorably after graduation or transfer from a participating institution.

Key Provisions

• Establishes a new Part X under Subchapter F of Chapter 1 of the Internal Revenue Code for NIL investment accounts.
• Defines an eligible athlete as an individual enrolled at a participating institution of higher education who participates in an amateur or collegiate athletic program.
• Requires institutions to elect participation; elections are effective for the academic year made and all subsequent years unless revoked with 12 months’ notice.
• Limits annual contributions to the annual gift tax exclusion amount under section 2503(b) and restricts contributions to no more than five taxable years after an athlete first receives qualified NIL income while enrolled.
• Allows contributions of qualified NIL income to be excluded from gross income at the athlete’s election, with such amounts also excluded from net earnings from self-employment.
• Provides that distributions before graduation or certain transfers are taxed as ordinary income, while post-graduation or post-transfer distributions are taxed at long-term capital gains rates up to an annual limit tied to section 1(h)(1)(B)(i).
• Imposes a 10% additional tax on non-qualified distributions, with exceptions for death, disability, qualified expenses, or rollovers.
• Defines qualified expenses to include career transition costs, higher education expenses, and certain medical expenses exceeding 7.5% of adjusted gross income.
• Permits rollovers to another NIL account for the same beneficiary or a family member, and allows changes in beneficiary to family members who remain eligible athletes.
• Authorizes conversion of the account to an IRA or Roth IRA after an individual has ceased to be an eligible athlete for at least one year, subject to a lifetime limit of $35,000 in conversions.
• Requires trustees to provide educational materials on investing and financial planning upon account establishment and annually thereafter.
• Grants the Secretary of the Treasury authority to issue regulations on verification, reporting, fraud prevention, and additional qualified expenses.

Significant Changes to Existing Law The bill adds an entirely new category of tax-exempt trust (NIL investment account) modeled in part on section 529 qualified tuition programs and section 408 retirement accounts. It creates special income exclusion and self-employment tax rules for NIL income that do not currently exist. It also introduces graduated tax treatment based on timing relative to graduation or institutional transfer, along with a new conversion pathway to retirement accounts.

Potential Impacts

• Government agencies: The Internal Revenue Service would administer account establishment, contribution limits, distribution taxation, and verification of eligibility and graduation status. The Department of Education would consult on defining athletic participation criteria.
• Citizens: Eligible student-athletes could defer taxation on NIL earnings and potentially receive preferential capital-gains treatment on later distributions, subject to limits and penalties for early or non-qualified use. Participating institutions would face compliance obligations.
• International relations: The legislation contains no provisions affecting international relations.

Main Stakeholders Affected

• Student-athletes who earn NIL income and enroll at participating institutions.
• Institutions of higher education that elect to participate.
• Trustees or custodians of the accounts (banks or approved persons).
• The Internal Revenue Service and Treasury Department.

Notable Legal, Constitutional, or Political Implications The bill operates entirely within Congress’s taxing power under Article I, Section 8 of the Constitution and does not raise apparent constitutional concerns. It intersects with ongoing developments in college athletics governance by creating federal tax incentives tied to institutional participation and graduation status. No international or state-law preemption issues are addressed in the text.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Steube, W. Gregory [R-FL-17]

Cosponsors (1)

Rep. Boyle, Brendan F. [D-PA-2]

Recent Actions

• 2026-06-30: Referred to the House Committee on Ways and Means.
• 2026-06-30: Introduced in House
• 2026-06-30: Introduced in House

Bill Versions

• Helping Undergraduate Students Thrive with Long-Term Earnings Act — issued 2026-06-30 — PDF (20 pages)