New Crypto Tax Bills: What US Holders of Stablecoins and Staking Rewards Need to Know

The House Ways and Means Committee has released a package of bills that would overhaul how the US taxes digital assets, and if you hold stablecoins like USDT or USDC, earn crypto staking rewards, or trade frequently, the proposals contain changes that could affect your tax bill as early as the first year they take effect. Nothing is law yet, but the legislative push is real, bipartisan in parts, and moving faster than most previous attempts. Here is what the bills actually say, what is still contested, and what you can do right now.

Where These Bills Come From

Committee Chair Jason Smith released a set of bills designed to define and tax digital assets in a coherent way. They share a broad framework with the Digital Asset PARITY Act, which was itself developed through discussion drafts from Committee members Rep. Max Miller and Rep. Steven Horsford. Smith has made clear he wants bipartisan backing before anything moves to a vote, and the package has already drawn cautious interest from the minority side.

The link to the CLARITY Act

You cannot understand the tax bills without knowing that their fate is tied to the Digital Asset Market Clarity Act, known as the CLARITY Act (H.R. 3633). That bill sets out a regulatory framework for digital assets more broadly, and lawmakers are unlikely to push the tax package forward until the CLARITY Act clears the Senate. The House passed its version 294 to 134 in July 2025. The Senate Agriculture Committee approved its portion in January and the Senate Banking Committee approved its version in May. The two Senate versions still need to be merged and pass with 60 votes, then reconciled with the House text. That is a significant legislative mountain, especially heading into midterm election season. For a deeper look at that process, see what the CLARITY Act means for your crypto tax.

The Stablecoin Proposal: No Gain, No Loss on USDT and USDC

This is probably the most practically significant proposal for everyday crypto users. Under current law, every time you swap a stablecoin, use it to buy something, or redeem it, you technically have a taxable event. If your cost basis differs even slightly from the redemption value, you have a gain or loss to report. In practice most people ignore this, but the IRS does not.

How the proposed rule would work

H.R. 9178 proposes that there is generally no gain or loss on a qualified stablecoin transaction. The key mechanism is a facts-and-circumstances test: if the consideration received is not less than 99.5% and not more than 100.5% of the stablecoin's redemption value, the basis is deemed to equal that redemption value. In plain terms, if your USDT or USDC stays within half a percent of one dollar, you have no taxable gain or loss to report.

That sounds simple, but there are carve-outs. The no-gain rule would not apply to:

• Traders, brokers, or dealers in stablecoins, or anyone in a substantially similar business.
• Taxpayers who use a functional currency other than the US dollar.
• Anyone who completes more than 5,000 digital asset transactions in a year.

That last carve-out is worth paying attention to. Active traders who happen to use stablecoins heavily could easily cross 5,000 transactions and lose the benefit entirely. If you're wondering whether your USDT tax position would actually improve under this bill, the answer depends on your transaction volume as much as the coin itself.

The de minimis network fee exception

H.R. 9178 also includes a small but practical exemption: no gain or loss is recognised on the disposal of a digital asset used to pay a network fee of $10 or less to validate another transaction. This targets the annoying situation where paying a gas fee technically triggers a taxable event on the tiny amount of crypto used to cover it.

Crypto Staking Tax: The Five-Year Deferral Option

Crypto staking tax is one of the most actively debated areas in US crypto policy. Under current IRS guidance, staking rewards are treated as ordinary income at the moment you receive them, valued at fair market value on the date of receipt. The new bills would not eliminate that treatment, but they would add an election to defer it.

What the deferral election involves

Both the Smith bills and the PARITY Act propose that taxpayers could elect to defer recognising mining and staking rewards as income for up to five years. When you eventually do recognise the income, it would still be taxed as ordinary income, not as a capital gain. The deferral is not a tax cut; it's a timing benefit.

Whether that timing benefit is meaningful for you depends on your situation. If you're staking a meaningful amount and the rewards are large enough to push you into a higher bracket in the year of receipt, deferral could smooth that out. If your staking rewards are modest and your income is relatively stable, the benefit may be less obvious.

Why Democrats are pushing back

Not everyone in Congress thinks this is a good idea. Ranking Member Richard Neal put it directly: he believes preferential deferral for staking and mining income deviates from general tax principles and gives digital assets an advantage over other investments. That concern has enough Democratic support to make the deferral provision genuinely uncertain. The underlying question of whether staking is taxable at receipt is not resolved by these bills; they simply offer an opt-in alternative to immediate recognition for those who qualify.

The Wash-Sale Rule Is Coming for Crypto

One of the most consequential proposals in the package is one that reduces a tax advantage, not expands one. The bills include a provision to extend the wash-sale rule to digital assets.

What the wash-sale rule means for crypto holders

Currently, the wash-sale rule applies to securities but not to crypto. That means you can sell Bitcoin at a loss, immediately rebuy it, and still claim the loss on your tax return. Under the proposed change, that strategy would be disallowed. If you sell a digital asset at a loss and buy a substantially identical asset within 30 days before or after the sale, the loss would be deferred.

This is one of the few provisions that has explicit Democratic support, partly because it raises revenue that can offset the cost of other provisions in the package. The practical implication: if you have been using crypto loss harvesting as a year-end tax strategy, and this provision passes with an early effective date, you will need to adjust your approach. Monitoring the proposed effective dates is genuinely important here. To understand how the broader US crypto tax reform picture is taking shape, including wash-sale timing considerations, it's worth keeping an eye on several parallel developments.

The Mark-to-Market Election for Active Traders

H.R. 9176 proposes an optional mark-to-market election under Section 475 for taxpayers who trade in widely traded digital assets. If you elect in, you would recognise gain or loss on those assets based on their fair market value on the last day of the tax year, and that gain or loss would be treated as ordinary income rather than capital gain or loss.

For traders who already generate mostly short-term gains and want simpler year-end accounting, this could be attractive. The bill includes a four-year adjustment under Section 481 and transition relief for asset identification. One unresolved practical question: which exchanges and pricing sources would be used to establish fair market value at year-end? Crypto markets trade across dozens of venues with different prices at any given moment, and the bill does not yet pin down a specific valuation methodology.

What the Senate Is Doing

The House bills do not exist in isolation. Sen. Cynthia Lummis has released a Senate bill that points in a similar direction, and Sen. Steve Daines has indicated that Senate Finance Committee members are working toward a draft bill of their own. The administration released a framework in July 2025 that aligns with many aspects of both the House and Senate proposals. The legislative machinery is moving on multiple tracks simultaneously, which increases the chances that something eventually passes but also means the final shape of any law could differ substantially from any current draft.

What You Should Do Right Now

None of these proposals are law. The midterm election cycle makes near-term passage difficult, and the 60-vote Senate threshold is a real obstacle. But the direction is clear enough that waiting until enactment to think about your position is probably too late.

Practical steps for individual holders

• Review your cost basis records for stablecoins. If the no-gain rule passes, you may not need them for qualifying transactions, but you will still need them for any transaction that falls outside the 99.5% to 100.5% band or that hits the 5,000-transaction limit.
• Document your staking rewards and their fair market value at receipt. Even if you plan to take the deferral election if it passes, you will need accurate records of what you received and when.
• Reconsider crypto loss-harvesting strategies. If wash-sale rules are extended to digital assets, executing a loss harvest in late 2026 and rebuying the same asset immediately could be disallowed retroactively depending on the effective date Congress sets.
• Check your transaction count. If you are approaching 5,000 digital asset transactions in a year, that threshold matters for stablecoin tax treatment under the proposed rules.
• Watch the effective dates. Different provisions in these bills carry different proposed start dates, and some include transition relief. The date a provision takes effect is often as important as the provision itself.

The legislative calendar is genuinely unpredictable, but that uncertainty cuts both ways. Provisions could be accelerated, delayed, or changed entirely before enactment. Keeping your records clean and your options open is the most resilient approach right now.

Frequently Asked Questions

Will I owe tax on USDT or USDC transactions if this bill passes?

Under the proposed no-gain rule in H.R. 9178, most everyday stablecoin transactions would produce no taxable gain or loss, as long as the value stays within 99.5% to 100.5% of the redemption value and you do not exceed 5,000 digital asset transactions in the year. If you are a trader, broker, or dealer in stablecoins, or you use a non-dollar functional currency, the exemption would not apply to you.

Is staking taxable under the new bills?

The bills do not eliminate the ordinary income treatment of staking rewards. They propose an election to defer recognition for up to five years, after which the income would still be taxed as ordinary income. Whether staking at the level of a trade or business would be treated differently is an open question the bills do not yet resolve.

When could these changes take effect?

Different provisions carry different proposed effective dates, and some include transition relief. No dates are finalised because the bills have not yet passed. The fate of the entire package is also tied to the CLARITY Act clearing the Senate, which has not happened yet. Effective dates are one of the most important things to monitor as the legislation develops.

Will the wash-sale rule actually pass?

The wash-sale extension to digital assets has bipartisan support and is seen as a revenue raiser that can help pay for other provisions. That makes it one of the more likely provisions to survive the legislative process in some form. But nothing is certain, and the final scope and effective date could change.

Do I need to do anything right now to calculate crypto taxes differently?

No immediate changes to how you calculate crypto taxes are required because these are still proposals. What you should do is ensure your records are accurate and complete, particularly for stablecoin transactions and staking rewards, so you are ready to apply whichever rules ultimately take effect. Reviewing your position now, rather than at tax time, gives you the most flexibility.

Source: BDO Insights