Ahead of the April tax filing deadline, it is worth noting that Bitcoin mining and cryptocurrency staking still fall under the income tax bracket and face “heavy” double taxation.
Currently, the US tax watchdog, the IRS (Internal Revenue Service), taxes rewards when you receive them as income and again if you sell them later for capital gains tax.
In a letter Last December, a group of lawmakers led by Mike Carey asked Treasury Secretary and Acting IRS Commissioner Scott Bessent for clarification on the tax treatment of crypto staking.
Lawmakers have called the current tax regime “burdensome” and disconnected from the underlying design of staking.
“American taxpayers are faced with a tax regime that is cumbersome to comply with and difficult to apply. administer, and out of step with the priorities of this administration.
They added,
“While the decision provides an initial perspective on the treatment of staking rewards, it does not accurately reflect the underlying technological and economic realities of staking and departs from fundamental principles of tax law.”
Source: House
According to the lawmakers, correcting the tax ruling would inform subsequent deliberations on how to approach the taxation of digital assets, as well as provide a boost.
But more than a month later, the IRS has not responded to the letter, and the IRS loophole will persist until 2026 unless its previous guidance is corrected.
An alternative push for a crypto tax
Despite this, attempts have been made to resolve this problem through alternative proposals.
It’s worth pointing out that Carey’s clarity campaign came after pro-crypto senator Cynthia Lummis’ tax. amendment on the “Big Beautiful Bill” was not adopted.
After the July attempt failed, Lummis introduced a dedicated system Invoice to address the same issue, but he has not yet left the committee at the time of writing.
Fast forward to October, and the Senate Finance Committee held a series of hearings with industry representatives.
In fact, during one of the meetings with Coinbase’s VP of Tax, Lawrence Zlatkin, argued that investors avoid US validators or stakers due to the tax burden.
“This uncertainty is causing investors to avoid U.S. validators altogether. This outcome would be disastrous for U.S. competitiveness.”
These hearings were considered the basis for making informed decisions on future bills to resolve the tax issue.
In fact, some of these deliberations, notably stablecoin exemptions for small transfers, have been featured in the broader market structure bill, the CLARITY Act.
Overall, there is no final law regarding the crypto staking tax as of early 2026. And continued uncertainty regarding the Market Structure Bill could also dim prospects for near-term relief.
However, tips from the IRS correcting the current tax regime can still help resolve the problem.
Final Thoughts
- The current US regime double-taxes crypto staking, with critics calling it “burdensome” and uncompetitive.
- There are alternative solutions to this policy problem, including through the CLARITY Act, but only IRS guidance can correct it without significant legislative changes.
