Bipartisan push aims to modernize staking tax rules and reduce burden on US crypto participants
bipartisan group is urging the Internal Revenue Service to revise how crypto staking rewards are taxed, arguing that current rules unfairly burden taxpayers and discourage participation in blockchain networks. The effort seeks action before 2026 to ensure tax treatment reflects actual economic gains rather than paper income.
Eighteen members of the US House of Representatives have formally requested that the IRS review existing guidance on crypto staking taxation. At the center of the concern is what lawmakers describe as “double taxation”staking rewards are taxed as income when received and again as capital gains when sold. According to the lawmakers, this structure creates significant administrative complexity and may result in over-taxation of unrealized gains.
They propose that staking rewards should be taxed only at the point of sale, aligning taxation with the moment when a taxpayer realizes actual profit. This approach, they argue, would more accurately reflect economic reality and simplify compliance.
Staking plays a critical role in securing proof-of-stake blockchains. Lawmakers warn that current tax treatment discourages millions of token holders from staking, potentially weakening network security and undermining US leadership in digital asset innovation. They emphasize that tax policy should support, not penalize, participation in emerging technologies.
Separately, another House proposal suggests allowing taxpayers to defer recognition of staking and mining rewards for up to five years. This option would provide temporary relief without fully eliminating immediate taxation, signaling growing momentum in Congress to modernize crypto tax policy.
Together, these efforts reflect increasing pressure on regulators to adapt tax rules to the realities of blockchain-based assets and ensure fair treatment for US participants.
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