USDT Tax, USDC Tax, and How Crypto Is Taxed in the US: What the New Bill Changes
The House Ways and Means Committee approved H.R. 10357, the Digital Asset Tax Certainty Act, on September 16, 2026 — and if it becomes law, it will be the first comprehensive federal income tax framework ever applied to digital assets. For anyone wondering how crypto is taxed in the US, or what USDT tax and USDC tax treatment actually look like going forward, this bill sets out specific answers. The catch: most of it doesn't kick in until 2027 or 2028, but one provision — the wash sale extension — could affect trades you've already made this year.
What H.R. 10357 Actually Proposes
The Joint Committee on Taxation published its full description of the bill on September 14, 2026, two days before the committee vote. The bill bundles five distinct sets of rules into a single package, each with its own effective date. Here's what each one does.
1. De Minimis Exemption for Network Fees
Under the proposal, no gain or loss would be recognized when you use digital assets to pay network or transaction fees of $10 or less. Right now, every time you pay a gas fee or any on-chain transaction cost in crypto, that payment is technically a disposal — you're spending an asset, so the IRS expects you to calculate a gain or loss on it. For active on-chain users, that creates dozens or even hundreds of tiny taxable events per year.
The $10 threshold is modest, but it would eliminate the vast majority of fee-related tax events for typical users. This provision is slated to take effect in 2028 if the bill passes.
2. Simplified Accounting for Widely Traded Assets
The bill would introduce an elective annual netting method for digital assets that meet a "widely traded" standard. Instead of tracking every individual buy and sell lot with its own cost basis, eligible holders could net gains and losses across the year. The tradeoff: all resulting gain or loss would be treated as short-term, regardless of how long you actually held the asset. That means it's taxed as ordinary income rather than at the lower long-term capital gains rates. This provision is also targeted for 2028.
Whether this simplified approach benefits you depends heavily on your holding period and overall tax situation. For frequent traders with mixed short and long positions, the calculation isn't straightforward.
3. New USDT Tax and USDC Tax Treatment for Stablecoins
This is the provision that will matter most to a large share of everyday crypto users. Under current rules, swapping a volatile crypto asset into a stablecoin like USDT or USDC is a taxable disposal. You recognize a gain or loss based on the fair market value of the stablecoin you receive versus your original cost basis in the asset you sold.
H.R. 10357 would change how qualifying stablecoins are treated for federal income tax purposes. The proposal is designed to reduce or eliminate the tax friction associated with moving into dollar-pegged assets, reflecting the argument that holding a stablecoin is economically closer to holding dollars than to holding a speculative asset. The exact mechanics — including which stablecoins qualify and how the no-gain-or-loss treatment applies — are described in the Joint Committee on Taxation's technical explanation. This change is proposed to begin in 2027.
For deeper context on what these stablecoin changes mean in practice, see our earlier coverage of what the Digital Asset Tax Certainty Act means for stablecoin holders.
4. Wash Sale Rules Extended to Digital Assets
This is the provision with the most immediate real-world impact. Wash sale rules currently apply to stocks and securities. They prevent you from claiming a tax loss on an asset you sell if you buy the same or a substantially identical asset within 30 days before or after the sale. Crypto has historically been exempt from these rules, which is why "tax-loss harvesting" has been a popular strategy — you sell a losing position, lock in the deduction, and immediately repurchase.
H.R. 10357 would close that window by extending wash sale treatment to traded digital assets. The effective date is tied to the bill's introduction date, not a future calendar year. That means wash sale rules could apply to disposals you've already made in 2026 if the bill passes and is backdated accordingly. This is the provision Forvis Mazars specifically flagged as "the more immediate concern" for taxpayers.
If you've been harvesting crypto losses this year expecting to rebuy immediately, you'll want to review those transactions carefully. The 30-day window could already be in play.
5. Staking Rewards: Ordinary Income, But Timing Still Unclear
The bill would codify that staking rewards are ordinary income, sourced by the taxpayer's residence. This aligns with the position the IRS has taken in guidance, but the bill does not resolve the more contested question of when that income must be recognized — at the moment rewards are received, when they vest, or at some other point.
The staking timing question has been a live dispute, and the absence of clarity here means ongoing uncertainty for stakers even if the bill passes. For more on how this connects to the broader legislative picture, see our piece on how the Clarity Act stall affects crypto staking tax in the US.
The Effective Date Puzzle
One of the most practically important aspects of H.R. 10357 is that its provisions don't all start at the same time. The staggered schedule matters because it affects how you plan between now and enactment.
What's Already in Play
The wash sale extension is the outlier. Its proposed effective date is tied to the bill's introduction, which means taxpayers can't simply wait until 2027 to adjust their behavior. If the bill passes with that backdated language intact, loss-harvesting strategies executed in 2026 could be disallowed retroactively.
What Starts in 2027
The new stablecoin tax treatment and changes to how charitable contributions of digital assets are handled are both proposed to begin in 2027. If you're planning significant stablecoin conversions or charitable giving involving crypto, the 2027 start date gives you a defined window to act under existing rules — or to wait for the new ones, depending on which is more favorable for your situation.
What Starts in 2028
The de minimis fee exemption, the simplified annual netting election, and changes to broker reporting requirements are all proposed for 2028. These are the longer-horizon items, but they're worth factoring into how you set up your record-keeping and accounting processes now, especially if you're an active on-chain user generating high volumes of small transactions.
Where the Bill Stands and What Could Derail It
Committee approval is a genuine milestone, but it's not close to the finish line. The bill still needs to pass the full House and then the Senate — and the Forvis Mazars analysis flags that the approaching mid-term elections add a layer of uncertainty to both. Legislative calendars tend to compress in election years, and ambitious tax bills frequently stall at the Senate stage even when they have strong House support.
Why the Bipartisan Signal Matters Anyway
That said, the committee vote reflects a meaningful shift. Congress has been trying for years to create a coherent federal framework for digital asset taxation, and the fact that this bill advanced through Ways and Means suggests there's genuine appetite for a legislative solution rather than continued reliance on piecemeal IRS guidance. Even if H.R. 10357 doesn't pass in its current form, its provisions are likely to shape whatever framework eventually does become law.
What This Means for How You File Crypto Taxes
If you're trying to figure out how to file crypto taxes or how to calculate crypto taxes for the 2026 tax year, the bill's current status means existing rules still apply for most transactions. But a few actions are worth taking now.
Review Your Loss-Harvesting Trades
If you've sold crypto at a loss and repurchased the same asset within 30 days this year, document those transactions carefully. If the wash sale provision passes with its proposed effective date, those losses could be disallowed. Knowing exactly what you did and when gives you the information you'll need to respond.
Don't Assume Stablecoin Swaps Are Already Tax-Free
The stablecoin treatment hasn't passed yet. Until it does, swapping any crypto asset into USDT or USDC is still a taxable event under current rules. Every disposal needs to be tracked, with cost basis and fair market value recorded at the time of the transaction. A reliable crypto tax report for 2026 will need to capture all of these, regardless of what the bill ultimately does.
Track Every Fee
The de minimis exemption for sub-$10 fees is a 2028 proposal. Right now, gas fees and other on-chain costs paid in crypto are still disposals. If you're an active DeFi user, your crypto tax report for 2026 likely includes more taxable events than you'd expect just from fees alone.
Staking Income: Report It
The IRS has taken the position that staking rewards are income when received. The bill would codify this, but it doesn't change the current requirement. If you've earned staking rewards in 2026, they need to be reported as ordinary income at the fair market value when you received them. The unresolved timing question under the bill doesn't create a reason to omit them from your return.
Frequently Asked Questions
Is USDT or USDC taxed when I swap into it?
Under current US tax rules, yes. Swapping any crypto asset into USDT or USDC is treated as a disposal, and you recognize a gain or loss based on the fair market value of the stablecoin received versus your cost basis in the asset you sold. H.R. 10357 would change this, but the bill hasn't passed. Until it does, existing rules apply.
Does the wash sale rule already apply to crypto?
Not yet. Wash sale rules currently apply to stocks and securities, not to digital assets. H.R. 10357 would extend them to traded digital assets, with an effective date tied to the bill's introduction. If the bill passes with that language, 2026 transactions could be affected retroactively.
When would the de minimis fee exemption take effect?
Under the bill's current structure, the $10 de minimis exemption for network and transaction fees is proposed to begin in 2028. Gas fees and other on-chain costs paid in crypto remain taxable disposals for 2026 and 2027 under existing rules.
What's the current tax treatment of staking rewards?
The IRS position is that staking rewards are ordinary income, recognized at fair market value when received. H.R. 10357 would codify this and source the income by the taxpayer's residence, but it does not resolve the disputed question of exactly when income recognition is triggered for staking. For 2026 filing purposes, report rewards as income when received.
Is H.R. 10357 now law?
No. The bill passed the House Ways and Means Committee on September 16, 2026. It still needs to pass the full House and then the Senate before being signed into law. Given the approaching mid-term elections and the complexity of the Senate calendar, the timeline remains uncertain.
Source: Forvis Mazars