Athlete
Stefan Jovanović SAMPLE
Sport · program
Basketball · Guard · Division-I program
Home country · visa
Serbia 🇷🇸 · F-1 (2 yrs in U.S.)
Residency
Nonresident alien
U.S. tax position
Total NIL income$1,200,000
U.S.-source (taxable here) — $450,000 earned abroad is foreign-source$750,000
Royalty / FDAP withholding — 10% treaty rate, not 30%$37,500
Service income (ECI) — graduated tax$100,797
Kentucky state tax — on the full U.S.-source amount$29,869
FICA — F-1 nonresident exemption$0
Total U.S. tax$168,166 · 22.4%
The 1970 treaty saves ~$75,000. Serbia has no treaty of its own, but the IRS applies the former U.S.–Yugoslavia treaty to it — dropping the royalty/FDAP rate from the 30% default to 10%. A generic NIL tool would have withheld $112,500 on the same income.
Where the income was earned (sourcing)
Only income for work performed in the U.S. is U.S.-taxable. The work-location log is the diligence trail behind the split.
Foreign-sourceFootwear endorsement — campaign shoot (Belgrade, on summer break)$450,000
U.S.-sourceCollective appearance + autograph session$300,000
U.S.-sourceSocial content + name/likeness licensing$450,000
Compliance checklist 1/9 · 1 alert
Visa work authorization — NIL performed in the U.S. — F-1 students: NIL/endorsement work physically performed in the U.S. is generally unauthorized employment and can jeopardize visa status. Confirm CPT/OPT authorization with immigration counsel before any U.S. NIL activity.
Work-location log — 3 activities recorded — 2 in U.S. ($750,000 U.S.-source) · 1 abroad ($450,000 foreign-source). Keep the log current — it is the diligence trail and the sourcing split.
Sourcing: $750,000 U.S.-source · $450,000 foreign-source — For a nonresident alien, only U.S.-source NIL income is generally U.S.-taxable/withheld; work genuinely performed abroad is foreign-source. Substance (where the athlete physically performed) controls — keep evidence.
Obtain a U.S. tax ID (ITIN) — No SSN/ITIN on file. An ITIN (Form W-7) is required to file and to claim treaty benefits without an SSN — often filed with the first return or alongside Form W-8BEN.
Collect Form W-8BEN — Required to claim the 10% treaty royalty rate instead of the 30% default. Without it, payers must withhold 30%.
Treaty — Serbia: 10% royalty rate — Via the 1970 U.S.–Yugoslavia treaty (successor state). Athlete/entertainer personal-service income (treaty Art. 16/17) may remain taxable at source regardless of the royalty rate — verify against IRS Pub 901 before filing.
KY does not honor the federal treaty — Federal treaty relief generally does not extend to state income tax — the state taxes the full U.S.-source amount.
Engage immigration counsel — A licensed immigration attorney should confirm the work-authorization basis (CPT/OPT) before any U.S. NIL activity.
NRA — FICA-exempt, no QBI / S-Corp FICA play — As an NRA student, generally exempt from Social Security/Medicare, so the S-Corp FICA-savings strategy does not apply, and §199A QBI is unavailable to nonresident aliens.
Filing calendar — 2025
Apr 15, 2025due soonQ1 2025 estimated tax 1040-ES (NR)
Jun 16, 2025upcomingQ2 2025 estimated tax 1040-ES (NR)
Sep 15, 2025upcomingQ3 2025 estimated tax 1040-ES (NR)
Jan 15, 2026upcomingQ4 2025 estimated tax 1040-ES (NR)
Mar 16, 2026upcomingExpect Form 1042-S from each U.S. payer (2025) Form 1042-S
Apr 15, 2026upcomingForm 8843 — exempt-individual statement (2025) Form 8843
Apr 15, 2026upcomingForm 1040-NR — nonresident return (2025) Form 1040-NR
Illustrative sample — Stefan is not a real person, and this is a planning illustration, not tax, legal, or immigration advice. Treaty figures verify against IRS Pub 901; visa/work-authorization questions need a licensed immigration attorney and the return a cross-border CPA. Computed under 2025 rules.