Key facts
- A 114-page crypto tax package, H.R. 10357, will be considered by the US House Ways and Means Committee on Wednesday.
A US House Ways and Means Committee crypto tax package, H.R. 10357, omits a provision that would have allowed miners and stakers to defer taxes on rewards until tokens are sold. The bill, set for consideration Wednesday, addresses crypto fees, stablecoins, and lending, but leaves existing reward taxation timing unchanged.
The omission of a reward deferral provision means miners and stakers may continue to face liquidity challenges due to immediate tax liabilities on newly acquired digital assets, potentially impacting their operational capacity and investment decisions.
The US House Ways and Means Committee is set to consider a comprehensive 114-page digital asset tax package, H.R. 10357, on Wednesday. Notably absent from the bill is a provision that would have allowed cryptocurrency miners and stakers to defer taxation on their rewards until the digital assets are sold. This provision was part of Representative Mike Carey's Tax Clarity for Mining and Staking Act, introduced in June.
Under the current framework, which the new package does not alter for mining and staking rewards, these gains are typically taxed when received or when they come under the recipient's control, potentially before they are converted to cash. The proposed legislation does, however, retain some provisions related to mining and staking, classifying income from blockchain validator activities as ordinary income and determining its source. It also allows qualifying investment trusts to stake digital assets without jeopardizing their status.
Beyond mining and staking, the package addresses several other areas of digital asset taxation. It aims to prevent taxpayers from recognizing gains or losses on cryptocurrency used for network or transaction fees up to $10. Special tax treatment is proposed for qualifying US dollar stablecoins, and qualifying digital asset loans would not be treated as taxable sales. Additionally, the bill includes measures for simplified accounting for widely traded crypto assets, extends wash-sale and constructive-sale rules to crypto transactions, and establishes a voluntary disclosure program for taxpayers to rectify past digital asset tax non-compliance.
In June, the committee had circulated seven draft proposals on digital asset taxation, covering stablecoins, mining, staking, and efforts to reduce the reporting burden. Industry groups, including the Blockchain Association, Crypto Council for Innovation, and Digital Chamber, had advocated for Carey's original legislation, arguing that taxing rewards before sale creates liquidity issues for miners and stakers. They also opposed an amendment that would have capped the deferral period at five years.