House panel advances first federal crypto tax framework a day after Senate's Clarity Act stalls
House committee sends crypto tax bill to the full House
The U.S. House Ways and Means Committee voted 38-5 on Wednesday to advance the Digital Asset Tax Certainty Act, a bill that would create the first federal tax rules for cryptocurrencies and other digital assets in the United States.
Committee Chair Jason Smith, a Republican from Missouri, called the vote "a historic moment" because Republicans and Democrats came together on a digital-asset tax framework after more than a year of work.
The vote came less than a day after the Senate failed to advance a separate, broader crypto bill called the Clarity Act in its first procedural vote. Democrats said they mostly opposed that bill over ethics concerns tied to President Donald Trump's growing crypto interests, which they said have reached hundreds of millions of dollars.
What the bill would do
The Digital Asset Tax Certainty Act sets several rules for how digital assets are taxed at the federal level:
- Small fee exemption: People would not pay taxes on network or transaction fees paid in crypto if the fee is $10 or less. This rule would not apply to service providers processing transactions on behalf of others. The provision would not take effect until December 2027 if the bill becomes law.
- Voluntary disclosure program: The Treasury Department would have to set up a Digital Asset Voluntary Disclosure Program within 12 months of the bill becoming law, letting qualifying taxpayers fix past returns and settle unpaid tax, interest, and penalties.
- Mining and staking income: Income from mining (using computers to process transactions) and staking (locking up tokens to help run a blockchain) would be taxed as ordinary income. Some investment trusts could stake their holdings without that activity alone changing their tax status.
- Removed deferral option: An earlier draft allowed taxpayers to defer recognizing that income until it was sold. That option has been removed, and the current bill does not say when mining and staking income must be reported.
Lawmakers point to gaps in the framework
Not every committee member was fully satisfied with the bill. Representative Steven Horsford, a Democrat from Nevada who worked on the legislation, said it was "not as comprehensive as I would have liked." He added that it "establishes ordinary income treatment, but leaves that timing question unresolved" for mining and staking rewards.
Representative Lloyd Doggett, a Democrat from Texas, criticized the bill during Wednesday's vote, saying it "still bestows billions in tax breaks for the crypto industry, benefiting billionaire crypto whales and some of the richest Americans like the Trump family."
What happens next in Congress
After the committee vote, the bill goes to the full House. But the House is scheduled to leave Washington until after the November elections, which means the bill is unlikely to move until the lame-duck session, the period between Election Day and the start of the new Congress.
Alison Mangiero, chief strategy officer and head of U.S. policy at the Crypto Council for Innovation, said the Senate Finance Committee has also expressed interest in advancing digital-asset tax legislation. She said there is "an opportunity to refine several important provisions, including the timing of income recognition for staking and mining rewards, broader de minimis relief for everyday digital asset transactions, and other technical issues."
Where things stand
The House committee vote is a confirmed step forward for federal crypto tax rules, but the bill still needs approval from the full House, the Senate, and the president before it can become law. With the House in recess until after the November elections, the earliest likely chance is later this year during the lame-duck session. Separately, the Senate's broader Clarity Act, which would have regulated digital-asset trading and oversight, failed its first procedural vote on Tuesday.