- A bipartisan group of 18 U.S. House lawmakers is urging the IRS to review crypto staking tax rules before 2026.
- The lawmakers seek to tax staking rewards only at the time of sale to avoid double taxation.
- The current tax approach is seen as a barrier to participation in crypto staking and network security.
- Separate legislative proposals aim to offer deferral options for staking and mining income and exempt small stablecoin trades from capital gains taxes.
A bipartisan group of 18 U.S. House lawmakers led by Republican Mike Carey has called on the Internal Revenue Service (IRS) to review and update its taxation guidelines on cryptocurrency staking before 2026. The lawmakers sent a letter to acting IRS commissioner Scott Bessent urging changes to what they describe as “burdensome” tax rules.
The group requests that taxes on staking rewards be applied only upon the sale of the assets, so individuals are taxed on their actual economic gain. “This letter is simply requesting fair tax treatment for digital assets and ending the double taxation of staking rewards is a big step in the right direction,” Carey stated in a release. Currently, rewards earned from staking are taxed twice: when received and again upon sale. The lawmakers argue that this discourages participation in staking, an essential process that helps maintain blockchain security.
The letter highlights that millions of Americans hold tokens on these networks and that the current tax system’s administrative burden could hamper U.S. leadership in digital asset innovation. The group asks whether any administrative obstacles exist to updating guidance by the end of the year.
In related efforts, House Representatives Max Miller and Steven Horsford introduced a discussion draft that also addresses crypto tax issues. Their proposal includes exempting small stablecoin transactions from capital gains tax and allowing taxpayers to defer income recognition on staking and mining rewards for up to five years instead of immediate taxation. This deferral option offers an alternative approach compared to the complete change sought by Carey’s group.
Staking involves holding or locking cryptocurrencies to support blockchain operations, typically earning rewards in return. Mining involves validating transactions and securing networks, also yielding rewards. Both require tax treatment that impacts user participation and blockchain ecosystem health.
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