How Is Crypto Taxed in the US After the 2026 Midterms?
The short answer: exactly as it was last week. The 2026 midterm results are shifting the balance of power in Washington, but nothing in the election changes how crypto is taxed in the US for the 2026 tax year. Your gains, losses and income are still governed by existing IRS rules, and the legislation that could reshape the market is stalled and uncertain.
That doesn't mean the election is irrelevant to you. Live coverage from Cointelegraph, using Associated Press race calls, shows Democrats and allied independents securing a Senate majority and Decision Desk HQ projecting a Democratic House. Control of both chambers decides which lawmakers chair the committees that oversee crypto, how the stalled CLARITY Act is handled, and how much scrutiny regulators and Trump-linked crypto ventures receive. This article separates what's actually been decided from what's still speculation, then walks through what you should do with your own records.
What the midterm results mean for crypto legislation
The source describes a sweeping night for Democrats. According to its tally, Democrats and independents who caucus with them reached 51 Senate seats after Democrat Josh Turek won in Iowa, including seats that weren't up for election this cycle. In the House, Democrats needed 218 seats for a majority, and Decision Desk HQ projected them to get there. The coverage also notes that all 435 House seats and 35 Senate seats were being contested. Because live blogs update through the night, treat individual tallies as snapshots and check final certified results before relying on any specific number.
The races crypto interests watched most
Crypto money was concentrated in a handful of contests. In Ohio, Democrat Sherrod Brown, described in the coverage as a longtime crypto critic, beat incumbent Republican Senator Jon Husted in a race that drew roughly $63 million in crypto industry spending. Much of that was aimed at supporting Husted or opposing Brown, including about $7 million from the Winklevoss-backed Digital Freedom Fund. Stand With Crypto cited Brown's 2024 vote against overturning the SEC's SAB 121 custody accounting guidance as part of its assessment of his record.
In Texas, Democrat James Talarico beat Republican Ken Paxton according to the Associated Press. Both candidates earned A ratings from Stand With Crypto, and both have spoken in favour of clear rules. In South Carolina, Democrat Annie Andrews was reported as defeating Republican Senator Darline Graham. In Kentucky, Republican Representative Andy Barr won, and he supports the CLARITY and GENIUS Acts. In Wyoming, Republican Harriet Hageman won the seat of Senator Cynthia Lummis, who chaired the Senate Banking Subcommittee on Digital Assets and sponsored the BITCOIN Act of 2025.
Why the CLARITY Act is still in limbo
The CLARITY Act is a market structure bill, which means it mostly decides who regulates which digital assets, not how your gains are taxed. The source says the election result reshapes its outlook and determines who leads the relevant committees, but it doesn't say the bill is dead or about to pass. Jerome de Tychey of Ethereum France told Cointelegraph it's too early to say what this means for crypto, adding that nothing will pass without cross-partisan support. That's a useful reality check: a divided or newly flipped Congress usually means slower, more negotiated legislation, not faster.
Maylea Ma, deputy general counsel at 1inch, offered a different angle. She expects real movement over the next few years to come from the SEC, the CFTC and Treasury rather than Congress. For filers, that matters because Treasury also oversees the IRS, and guidance on reporting often arrives through agencies long before it arrives through statute.
How is crypto taxed in the US right now?
The election source doesn't cover tax mechanics, so here is the established baseline that applies regardless of who controls Congress. For federal purposes, the IRS treats digital assets as property. That single idea drives most of what follows. Please confirm current-year details on IRS.gov or with a qualified tax professional, since forms and thresholds can change.
Taxable events you should recognise
Selling crypto for dollars, swapping one token for another, and spending crypto on goods or services are generally disposals, which means you compare what you received against your cost basis to find a gain or loss. Income from mining, staking rewards, airdrops or getting paid in crypto is generally taxed as ordinary income at its fair market value when you receive it. Buying crypto with dollars and simply holding it isn't a taxable event on its own.
Short-term versus long-term gains
How long you held the asset matters. Gains on assets held for a year or less are generally taxed at your ordinary income rate, while gains on assets held longer than a year generally qualify for lower long-term capital gains rates. Losses can offset gains, and there are annual limits on how much net loss you can use against other income. The election doesn't touch any of this for 2026.
| Activity | General US federal treatment |
|---|---|
| Hold crypto bought with dollars | Not taxable until you dispose of it |
| Sell crypto for dollars | Capital gain or loss |
| Swap one token for another | Capital gain or loss on the token you gave up |
| Spend crypto on goods or services | Capital gain or loss on the disposal |
| Staking, mining, airdrops, crypto pay | Ordinary income at fair market value when received |
What the midterms could change, and what they probably won't
It helps to sort the possibilities into three buckets: things that are genuinely at stake, things that are speculation, and things that are already settled.
Realistic areas of change
The source points to two likely consequences of Democratic control. First, committee leadership changes, which affects which crypto bills get hearings. Second, more congressional oversight of Trump-linked crypto businesses and regulator decisions. Senate control also affects confirmation of future presidential nominees to regulatory posts, which can shape how aggressively agencies pursue crypto rules. None of these items is a tax-rate change. They're about who writes and enforces the rules.
On the tax side specifically, there's an open conversation in Washington about clarity. We've covered the Blockchain Association's call for crypto tax clarity as a larger tax bill stalled, and the proposed IRS voluntary disclosure program aimed at helping people fix past reporting mistakes. Whether either of those moves faster or slower under a new Congress is unknown, and the election source doesn't say. Anyone claiming to know is guessing.
What isn't changing for this tax year
Tax law for a given year generally can't be rewritten after that year ends in a way that surprises you without a lot of political friction, and nothing in the election coverage suggests a new crypto tax law is imminent. The practical takeaway for your 2026 return is that your cost basis records, your holding periods and your income events still decide your tax bill. Reporting rules also continue on their existing path, including the broker reporting framework and thresholds like Form 1099-K and the restored $20,000 threshold, which can still land in your mailbox if you've been paid through certain platforms.
What you should do now to prepare your crypto tax report
Political uncertainty is a good reason to tighten up your own process, because the one thing you control is the quality of your records. If you've ever wondered how to file crypto taxes without a last-minute scramble, the answer is to start before the year ends.
Get your records in order
Export transaction histories from every exchange and wallet you've used this year, including ones you've stopped using. Match each disposal to its acquisition so your cost basis is traceable. Pay particular attention to transfers between your own wallets, which are not taxable but often show up as confusing entries that inflate gains if they aren't labelled correctly. If you've used DeFi, staking or bridges, flag those transactions early because they usually need the most manual review.
Use a calculator, then sanity-check it
A good crypto tax calculator can help you calculate crypto taxes quickly once your data is clean, and crypto tax software can generate the crypto tax report you'll use when filing. Treat the output as a draft, not a verdict. Check that the opening balances look right, that no transfers were misread as sales, and that income events carry sensible fair market values. A mismatch between what your exchange reports and what your software calculates is the most common red flag.
Consider year-end planning
Because 2026 rules are fixed, there's still time to act before December 31. Reviewing unrealised losses, understanding your holding periods and thinking about when to realise gains are all conversations to have with a tax professional. We can't tell you what's right for your situation, but we can tell you that waiting for Congress to resolve things isn't a strategy.
If you've made mistakes in past years
If you haven't reported crypto in earlier years, don't assume the political shuffle will make the problem disappear. Our coverage of a US bill that would give crypto investors a way to fix past tax mistakes explains why a structured route may matter, but it's a proposal, not law. If you're worried about past filings, speak to a qualified tax adviser about your options today.
Why the accounting side still matters to individual filers
Individual filers don't keep books the way a company does, but the same discipline helps. The SAB 121 reference in the Ohio race is a reminder that accounting guidance for crypto custody has been a political issue too, at least for institutions. For you, the equivalent lesson is simple: how crypto is recorded, held and reported shapes how it's treated later, so consistency beats improvisation. Pick a cost basis method, apply it consistently, and document why. If you move to new software or a new platform, reconcile the opening balances before you trust the new numbers.
It's also worth remembering that regulation of crypto markets and taxation of crypto gains are separate tracks. A market structure bill can decide whether a token is treated as a security or a commodity without changing your capital gains calculation. Keep those two conversations apart when you read the headlines, and you'll avoid most of the false alarms.
Frequently asked questions
Did the 2026 midterms change how crypto is taxed in the US?
No. The election changes who controls Congress, not the existing tax rules. For the 2026 tax year, the IRS still treats digital assets as property, and your gains, losses and income are calculated under current law.
What happens to the CLARITY Act now?
It's described as stalled, and the election reshapes its outlook by deciding committee leadership. Observers quoted in the coverage stress that nothing will pass without cross-partisan support. It's a market structure bill, so it wouldn't directly set your tax rate.
Should I wait for new laws before filing my crypto tax report?
No. Your return for a given year is based on the rules in force for that year. Waiting won't help, and delays can lead to penalties or interest. Prepare your records now and file based on current law.
Can a crypto tax calculator replace a tax professional?
A crypto tax calculator helps you calculate crypto taxes from your transaction data, but it can't judge unusual situations or fix bad inputs. Review the output carefully and consult a qualified professional for complex activity such as DeFi, staking or large gains.
Is moving crypto between my own wallets taxable?
Generally no, because you're not disposing of the asset. The problem is record-keeping: these transfers often look like sales if they aren't matched on both sides, so label them clearly in your records.
Source: Cointelegraph Regulation