#USCryptoStakingTaxReview
In the United States, crypto staking is subject to a "two-tier" tax system: it is taxed first as ordinary income when you receive the rewards, and then as capital gains when you eventually sell them.
As of late 2025, the IRS follows Revenue Ruling 2023-14, which solidifies that staking rewards must be reported in the year you gain "dominion and control" over them.
1. Income Tax (The "Receipt" Phase)
The moment you have the ability to sell, swap, or move your staking rewards, you have officially earned income.
Tax Basis: You must report the Fair Market Value (FMV) of the tokens in USD at the time they were received.
Tax Rate: This is taxed at your standard federal income tax bracket (ranging from 10% to 37%).
Reporting: Typically reported on Form 1040, Schedule 1 as "Other Income." If you are staking as a business (e.g., running a professional validator node), you may use Schedule C to deduct expenses like hardware or electricity.
2. Capital Gains (The "Sale" Phase)
When you eventually dispose of those rewards (sell for USD, trade for another crypto, or buy a coffee), you trigger a second taxable event.
Calculation: Your "cost basis" is the FMV you reported as income earlier. Your gain or loss is the difference between that basis and the final sale price.
Short-Term: Held for \le 1 year (taxed as ordinary income).
Long-Term: Held for >1 year (taxed at 0%, 15%, or 20% depending on total income).
Reporting: Reported on Form 8949 and Schedule D.
3. Key Rules & Late 2025 Updates