1️⃣ Bipartisan Push to Revise Staking Tax Rules (Before 2026)
A group of 18 U.S. House lawmakers led by Rep. Mike Carey has formally asked the IRS to revise how crypto staking rewards are taxed. They argue the current system results in double taxation, taxing rewards both when received and again when sold which many say discourages participation in network staking and innovation. The lawmakers want the IRS to update guidance before 2026 to tax rewards only at sale or disposition, aligning tax treatment more fairly with economic gain.
2️⃣ Draft Legislation Proposes Broader Crypto Tax Clarity
Alongside the double-tax issue on staking, a new bipartisan draft bill (often referred to as the Digital Asset PARITY Act) was introduced that would:
Exempt small stablecoin payments (≤$200) from capital gains tax
Allow deferral of staking and mining rewards taxation for up to five years
Aim to modernize crypto tax treatment to be more consistent with how digital assets are actually used in the economy.
3️⃣ Current IRS Position Still Tax-Heavy on Staking Rewards
Under current IRS guidance (Revenue Ruling 2023-14), staking rewards are taxable as income when received, even if not sold. This has led to complaints from stakers who pay tax on “phantom income” taxable income without liquidity.
🧠 Why This Matters for Crypto Investors
🔥 Staking Reward Tax Uncertainty
Right now, U.S. stakers can owe tax on receipt of rewards, even before selling them, a burden many view as unfair and a disincentive to securing proof-of-stake networks.
⚖️ Legislative Efforts Aim to Fix It
The bipartisan push aims for tax fairness by:
Taxing staking rewards at sale, not receipt
Deferring tax on staking/mining rewards
Exempting small stablecoin payments from routine crypto tax headaches
📅 Potential Timeline
Lawmakers want revised IRS guidance or reform before 2026, meaning negotiations and policy discussions could intensify early next year.
📌 Bottom Line
The U.S. crypto staking tax landscape is under review, with growing political momentum to overhaul unfair tax treatment that currently penalizes stakers twice. If successful, these reforms could:
Reduce the tax burden on staking participants
Encourage broader participation in PoS networks
Align U.S. policy more closely with economic reality and innovation
Not finalized yet, but developments are active and worth watching closely.