A significant bipartisan effort is underway in the U.S. House of Representatives to reform the nation's cryptocurrency staking tax regulations. Legislators are urging the Internal Revenue Service (IRS) to overhaul its current guidelines, arguing that the existing framework unfairly burdens digital asset participants and stifles innovation.
The Call for Fairer Staking Taxation
Led by Republican Mike Carey, a group of 18 House representatives has formally requested the IRS to update its "burdensome" crypto staking tax rules by early 2026. The core of their argument centers on the current practice of "double taxation," where stakers are taxed both upon receiving staking rewards and again when those assets are eventually sold. Lawmakers propose a shift to taxing these rewards solely at the point of sale, ensuring that individuals are taxed based on their "actual economic gain." The legislators contend that these existing tax policies actively discourage participation in a crucial aspect of blockchain security and innovation, hindering American leadership in digital asset development.
Expanding the Scope of Crypto Tax Reform
This push isn't isolated. Complementing Carey's initiative, Representatives Max Miller and Steven Horsford have also introduced a discussion draft aimed at alleviating various cryptocurrency tax burdens. Their proposal includes a significant deferral option for staking and mining rewards, allowing taxpayers to postpone income recognition for up to five years instead of immediate taxation upon receipt. Additionally, their draft seeks to exempt small stablecoin transactions from capital gains taxes. These legislative efforts collectively underscore a growing consensus that current crypto tax laws need substantial revision to support the burgeoning digital asset economy and strengthen U.S. leadership in digital asset innovation.
