Current US Crypto Staking Tax Rules (as of December 24, 2025)
The IRS treats cryptocurrency staking rewards as ordinary income taxable in the year you gain "dominion and control" over them (i.e., when you can access, transfer, or sell the rewards). This is based on Revenue Ruling 2023-14, which remains in effect.
Taxation timing: Rewards are taxed at their fair market value (FMV) in USD upon receipt, even if you don't sell them. This is reported as ordinary income (tax rates up to 37% depending on your bracket) on Schedule 1 (Form 1040).Later disposal: When you sell, trade, or spend the rewards, you pay capital gains tax (short- or long-term) on any appreciation/depreciation from the original FMV (your cost basis).
Criticism: This can lead to "double taxation" — income tax on receipt + capital gains on sale — and forces taxpayers to pay taxes on unrealized gains if the price drops afterward.
No de minimis exemption: All rewards must be reported, regardless of amount.
Platforms/ETFs: In November 2025, the IRS issued Revenue Procedure 2025-31, creating a safe harbor for crypto ETFs/ETPs and trusts to stake assets and distribute rewards without losing favorable tax status. This benefits institutional products but not individual stakers.
Recent Developments and Push for Review
In late December 2025, significant bipartisan momentum emerged to change these rules:
Lawmakers' letter (December 19-21, 2025): A group of 18 House lawmakers (led by Rep. Mike Carey, R-OH) urged Treasury Secretary and acting IRS Commissioner Scott Bessent to revise guidance before 2026. They argue current rules discourage staking (key for proof-of-stake network security), create administrative burdens, and risk over-taxation. Proposal: Tax rewards only upon sale, based on actual realized gains.
-Digital Asset PARITY Act (discussion draft, December 2025): Bipartisan bill proposes:
- Deferral of staking/mining rewards taxation for up to 5 years (or until sale).
- Exemption from capital gains for small stablecoin payments (under $200).
- Alignment with securities laws, wash sale rules for crypto, etc.
- **Context**: This builds on pro-crypto shifts under the Trump administration, including November 2025 ETF staking guidance. Lawmakers warn outdated rules could push innovation offshore and weaken US blockchain leadership
No changes have been implemented yet for individual stakers — the 2023 ruling applies for 2025 taxes (filed in 2026). However, strong bipartisan pressure and recent ETF relief suggest potential IRS administrative updates or legislation in 2026. The hashtag
#USCryptoStakingTaxReview USCryptoStakingTaxReview has been trending on X in discussions about these proposals, often alongside market news.
For personalized advice, consult a tax professional, as rules can vary by situation (e.g., staking pools, DeFi). Track IRS announcements closely.