US House Crypto Tax Bill Skips Mining and Staking Tax Deferral
Digital Asset Tax Certainty Act Omits Key Deferral Provision
The US House Ways and Means Committee will consider a 114-page crypto tax package on Wednesday that does not include a way to delay taxes on mining and staking rewards. The bill, called the Digital Asset Tax Certainty Act (H.R. 10357), was published alongside the committee's markup notice on Monday.
Without the deferral provision, taxes on rewards from mining (generating new cryptocurrency through computing power) and staking (locking up crypto to support a blockchain network) are owed when the rewards are received, even if they are not sold for cash.
What the Bill Covers and Misses
- The bill skips a provision from Representative Mike Carey's Tax Clarity for Mining and Staking Act, introduced in June, which would have let taxpayers choose to pay taxes when rewards are sold instead of when received.
- It includes rules to classify income from blockchain validator activities as ordinary income and determine if that income is from inside or outside the US.
- It allows qualifying investment trusts to stake digital assets without losing their trust status.
- It prevents taxpayers from recording gains or losses when crypto is used to pay network fees up to $10.
- It proposes special tax treatment for qualifying US dollar stablecoins (digital currencies pegged to the dollar).
- It lets qualifying digital asset loans happen without being treated as taxable sales.
- It offers simplified accounting for widely traded crypto assets and extends wash-sale and constructive-sale rules to crypto.
- It establishes a voluntary disclosure program for correcting earlier tax violations.
Details of the 114-Page Tax Package
The package was published by the House Ways and Means Committee. It retains some mining and staking provisions but omits the deferral. For example, it classifies validator income as ordinary income and allows investment trusts to stake without losing status.
Industry Groups Push for Deferral
In June, the Blockchain Association, Crypto Council for Innovation, and Digital Chamber urged Congress to pass Representative Carey's legislation as introduced. They argued that taxing rewards before they can be sold creates liquidity problems for miners and stakers. They also opposed an amendment that would have limited the deferral to five years.
Why This Matters for Miners and Stakers
The bill's omission means miners and stakers may face taxes on rewards before they can sell them for cash, which could lead to cash flow issues. The industry groups highlighted this as a key concern, saying it affects their ability to manage finances.
Next Step: Committee Markup
The committee is scheduled to hold a markup of the bill on Wednesday. This is a step where lawmakers review and may amend the legislation before it moves forward.