US Crypto Tax Bill Drops Mining and Staking Deferral
The House Ways and Means Committee is advancing a 114-page crypto tax package that makes meaningful changes to how digital assets are taxed, but it leaves out the one provision that miners and stakers were counting on most: the ability to defer taxation of block rewards until the tokens are actually sold. If you earn staking rewards or mine crypto, your current tax exposure stays exactly where it is, and understanding what the bill does and does not do matters right now.
What the Bill Is and Where It Stands
The Digital Asset Tax Certainty Act, H.R. 10357, was published alongside the committee's markup notice and is scheduled for committee consideration. At 114 pages, it covers a broad range of digital asset tax questions that have been unresolved for years. The legislation arrives at the same moment the Senate is weighing a separate market-structure bill that would divide crypto regulatory oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The Provision That Did Not Make It In
Representative Mike Carey introduced a bill in June that included a reward-timing provision allowing taxpayers to choose how they recognize newly created tokens. Under that proposal, you could either treat mining or staking rewards as income the moment you receive them (the current default rule) or elect to treat them like self-created property, deferring any tax liability until you sell. That optionality was stripped out of H.R. 10357 entirely.
Without it, the existing treatment holds: mining and staking rewards are taxable when received or when they come under your control, even if you have not converted a single token to cash. For stakers running validators on proof-of-stake networks and for miners absorbing energy costs, this can mean a real cash-flow squeeze, paying income tax on tokens you still hold and whose value could fall before you ever sell.
What the Bill Actually Changes for Staking and Mining
The package does address staking and mining in several specific ways, even without the deferral provision.
Validator Income Classified as Ordinary Income
The bill codifies that income earned from blockchain validator activities is ordinary income. This is broadly consistent with how the IRS has treated such income under existing guidance, but putting it into statute removes ambiguity and forecloses arguments that validator rewards could qualify for preferential capital gains rates at the point of receipt.
Sourcing Rules for Cross-Border Situations
H.R. 10357 would establish whether validator income is sourced inside or outside the United States. This matters for US persons living abroad and for foreign nationals with US-connected mining or staking operations. Clear sourcing rules affect whether foreign tax credits can offset US liability and how treaty provisions interact with reward income.
Investment Trusts Can Now Stake
Qualifying investment trusts would be permitted to stake digital assets without losing their trust status under the bill. This is a notable carve-out for institutional vehicles that hold digital assets on behalf of investors and have previously been constrained from participating in staking to avoid jeopardising their legal structure.
Key Provisions Beyond Staking and Mining
The bill's scope extends well beyond reward timing. Several provisions could affect everyday crypto holders and businesses in practical ways.
Transaction Fee De Minimis Rule
Under current rules, using crypto to pay a network or transaction fee is a taxable disposal if the crypto has appreciated. H.R. 10357 would prevent taxpayers from recognising gains or losses when crypto is used to pay network or transaction fees of up to $10. This is a targeted but genuinely useful fix for anyone interacting regularly with DeFi protocols or on-chain applications, where small fee payments currently generate reportable events.
Stablecoin Tax Treatment
The package proposes special tax treatment for qualifying US dollar stablecoins. The specific mechanics are not detailed in the available excerpt, but the direction is consistent with broader legislative efforts to treat dollar-pegged stablecoins more like cash equivalents rather than property subject to gain-or-loss calculation on every transaction.
Digital Asset Lending
Qualifying digital asset loans would be allowed to occur without being treated as taxable sales. This addresses a long-standing ambiguity: when you lend crypto to a counterparty or a protocol, does that transfer trigger a disposal? The bill would answer that question for qualifying arrangements, bringing crypto lending closer to the treatment of securities lending under existing tax law.
Simplified Accounting for Widely Traded Assets
The bill would introduce simplified accounting for widely traded crypto assets, though the precise method is not specified in the available detail. Simplified cost-basis rules could reduce the record-keeping burden for high-frequency traders and anyone holding assets across multiple wallets and exchanges.
Wash-Sale and Constructive-Sale Rules Extended
Currently, the wash-sale rule that prevents investors from claiming a loss on a security they repurchase within 30 days does not apply to crypto, because crypto is property rather than a security under existing law. H.R. 10357 would extend wash-sale and constructive-sale rules to digital assets. This closes a tax-loss harvesting strategy that some crypto holders have used aggressively. If the bill passes, selling at a loss and buying back the same token within the wash-sale window would no longer generate a deductible loss.
Voluntary Disclosure Program
The package would establish a voluntary disclosure program for taxpayers who want to correct earlier digital asset tax violations. Voluntary disclosure programs typically allow taxpayers to come forward, pay what they owe, and avoid the harsher penalties that come with an IRS-initiated audit or enforcement action. The availability of such a program signals that legislators recognise that many prior-year filings may be inaccurate and are offering a structured path to compliance.
Industry Reaction and the Liquidity Problem
The Blockchain Association, the Crypto Council for Innovation, and the Digital Chamber all urged Congress to include the deferral provision. Their core argument is straightforward: taxing rewards before they can be sold creates a liquidity problem. A validator earning newly minted tokens owes income tax at ordinary rates based on the fair market value at receipt, but if the token price drops before they sell, they may end up paying more in tax than the tokens are eventually worth. The groups also opposed any version of deferral that would have capped the delay at five years, arguing it would be too restrictive to be useful in practice.
The committee had released draft proposals in June ahead of a hearing on digital asset taxation, covering stablecoins, mining, staking, and reporting-burden reduction. The final package retained many structural elements from those drafts while removing the reward-timing election entirely.
What This Means for You Right Now
The bill is still at committee stage. It has not passed the full House, let alone the Senate, so nothing has changed yet in law. But the direction of travel is now clearer, and both individual filers and businesses should be tracking it closely.
For Individual Crypto Holders and Stakers
If you earn staking rewards, the tax clock still starts the moment tokens hit your wallet. That means you need to record the fair market value of every reward at the date and time of receipt, because that value becomes your income figure and your cost basis for any future sale. Keeping that data current is non-negotiable. The proposed $10 fee exemption and the stablecoin provisions could reduce your reportable events if the bill passes, but the reward-timing treatment you face today is the one you're planning around now.
It's also worth paying attention to the wash-sale extension. If that provision becomes law, strategies that currently involve selling a losing position in Bitcoin or Ether and immediately repurchasing will no longer generate a deductible loss. Reviewing any tax-loss harvesting plans before the bill progresses further makes sense.
For US filers who want to understand the current reporting landscape, our piece on Form 1099-DA and what it means for staking and DeFi holders covers the broker-reporting rules already in force.
For Businesses, Validators, and CFOs
Institutional stakers and treasury teams running validator nodes face the same timing mismatch as individual holders, just at scale. The bill's confirmation that validator income is ordinary income, combined with the new sourcing rules, gives finance teams clearer parameters for financial-statement classification and cross-border tax planning. However, the absence of a deferral option means that accrual accounting for reward income remains complex: you recognise income at fair value on receipt, which can create material taxable income on the books even in periods of declining token prices.
The investment trust staking provision is the most significant institutional change in the bill. Trusts that have been sitting out of staking to protect their legal status will want legal and tax counsel to assess whether they now qualify for the carve-out and what governance changes may be needed to participate.
The voluntary disclosure program is worth flagging to any client who has held digital assets since 2017 and has not been fully consistent in their reporting. A structured path to correction, with reduced penalty exposure, is preferable to waiting for an IRS notice.
For a broader view of the US crypto tax reform landscape taking shape in 2026, see our coverage of the full package of stablecoin, DeFi, and staking proposals.
Frequently Asked Questions
Does the bill change how staking rewards are taxed right now?
No. H.R. 10357 is still at committee stage and has not become law. Under current IRS guidance, staking and mining rewards are taxable as ordinary income when received or when they come under your control, based on fair market value at that point. That treatment remains unchanged unless and until new legislation passes both chambers and is signed into law.
What was the deferral provision and why was it removed?
Representative Mike Carey's earlier bill included an election allowing taxpayers to treat newly created tokens as self-created property, deferring tax until the tokens are sold rather than paying at receipt. The House Ways and Means Committee did not include that provision in H.R. 10357. The committee has not published a detailed explanation, but industry groups had argued that both an unlimited and a five-year-capped version of the deferral were necessary to avoid liquidity problems for miners and stakers.
How would the $10 fee exemption work in practice?
Under the proposal, if you use crypto to pay a network or transaction fee and the amount of crypto used has a fair market value of $10 or less, you would not need to recognise a gain or loss on that payment. This exemption would be particularly useful for frequent on-chain users, such as DeFi participants, who currently generate small taxable events every time they pay a gas fee in an appreciated token.
Does extending the wash-sale rule mean I can no longer harvest crypto losses?
If the wash-sale extension passes into law, you would no longer be able to sell a crypto asset at a loss, immediately repurchase the same asset, and claim the loss as a deduction. The same 30-day repurchase window that applies to securities would apply to digital assets. You could still realise losses by selling and waiting out the window before buying back, or by rotating into a different asset in the meantime. The bill has not passed yet, so current rules still apply while it is in committee.
What is the voluntary disclosure program proposed in the bill?
The bill would create a formal program allowing taxpayers to proactively correct prior digital asset tax filings that may have been inaccurate or incomplete. Voluntary disclosure programs generally offer reduced penalties compared with those assessed in an IRS-initiated examination, in exchange for full cooperation and payment of the correct tax and interest. The specific terms of the crypto program would depend on how the provision is ultimately drafted and whether it survives the full legislative process.
Source: Cointelegraph