US House Crypto Tax Bill Leaves Mining and Staking Reward…

House Ways and Means Committee lawmakers have released a crypto tax package that sets new rules for digital asset transactions, mining and staking, yet leaves out a provision that would have let miners and stakers defer tax on their rewards until they sell the assets.

H.R. 10357 would treat income from digital asset validation activities as ordinary income and set rules for whether mining and staking income is sourced inside or outside the United States. Its provisions also reach crypto transaction fees, stablecoins, wash sales, digital asset lending, broker reporting and voluntary tax disclosures.

Mining And Staking Rules

Under the bill, digital asset validation supporting activities take in staking, mining and similar work that supports transaction validation, and income from those activities would count as ordinary income rather than capital gains. That treatment mirrors current IRS practice, which several members of Congress have urged the agency to revisit over concerns it taxes staking rewards twice, once at receipt and again as a capital gain or loss at sale.

Sourcing rules would treat that income as U.S.-sourced when the taxpayer is a U.S. resident and foreign-sourced when the taxpayer is a nonresident, with separate treatment for U.S. taxpayers operating through qualified business units abroad and foreign taxpayers that maintain a U.S. office or fixed place of business.

Absent from the package is any general rule letting taxpayers postpone recognition of mining or staking rewards until they sell the tokens. Its mining and staking sections instead govern the source and character of the income, along with the treatment of investment trusts that stake digital assets.

Industry groups have pushed Congress to advance a competing approach through the Tax Clarity for Mining and Staking Act, H.R. 9175, which Representative Mike Carey introduced in June and which would let taxpayers defer income recognition until they dispose of the rewards.

A separate withholding mechanism would apply to certain illiquid digital assets received for validation activities. Where those assets cannot be sold, exchanged or transferred for a fixed period, the payor could withhold the applicable amount and liquidate them after the restriction ends, taking effect for assets received after December 31, 2026.

Investor Takeaway

Broader Crypto Tax Changes

Network and transaction fees would gain a de minimis exception, with no gain or loss recognized when a digital asset pays a qualifying fee of $10 or less. Taxpayers who made more than 5,000 digital asset transfers in the prior year, along with traders, brokers and dealers, could not use it, and the exception would apply to dispositions after December 31, 2027.

Wash sale rules would also reach traded digital assets, excluding qualified U.S. dollar stablecoins, by folding them into the existing framework as specified assets. Additional sections govern digital asset lending, charitable contributions, stablecoin transactions, traders and dealers, broker requirements and a Digital Asset Voluntary Disclosure Program.

Earlier proposals covered mining and staking rewards, small transactions, charitable donations and wash sales, reflecting an effort to write dedicated digital asset rules rather than stretch existing provisions to fit. That effort has already reshaped other parts of the code, including the restoration of 100% bonus depreciation for mining equipment acquired after January 19, 2025.

The tax package moves forward as the separate CLARITY Act loses momentum, with Polymarket traders now putting its odds of becoming law in 2026 at roughly 18%. A bipartisan group of 18 attorneys general, led by New York’s Letitia James, urged the Senate on September 14 to reject the market-structure bill, warning that its unclear wording could let the Securities and Exchange Commission override state securities enforcement and weaken the states’ ability to pursue crypto fraud.

Investor Takeaway