Crypto groups back tax deferral bill for miners, stakers

Three of the largest U.S. crypto advocacy organizations have urged Congress to pass a bill that would let miners and stakers defer taxation on newly created tokens until they are sold.

The Blockchain Association and the Crypto Council for Innovation, joined by The Digital Chamber, sent a joint letter to the House Ways and Means Committee voicing support for H.R. 9175, the Tax Clarity for Mining and Staking Act. Representative Mike Carey introduced the legislation.

The groups described the proposal as a balanced compromise that would resolve years of uncertainty around the tax treatment of mining and staking rewards. Under current IRS guidance, miners and stakers generally recognize taxable income when rewards are received. The bill would preserve that as a default.

The legislation would also let taxpayers elect an alternative approach. If they do, newly minted digital assets are not included in gross income when received. Instead, gains are recognized at sale or disposal.

Supporters argue miners and stakers can face tax bills before they have converted rewards into cash. The letter cites IRS Notice 2014-21, which treats mined Bitcoin as taxable income upon receipt, and Revenue Ruling 2023-14, which says staking rewards are immediately taxable. Taxing rewards at creation can create liquidity pressures and force asset sales over what the groups describe as phantom income concerns.

The bill includes a provision for investment trusts that stake digital assets. A trust would not lose its tax status solely because it stakes assets held for investors, as long as it is not actively in the business of validating transactions. That clause could matter as asset managers explore staking-enabled products and seek clearer tax treatment for digital asset funds.

No markup date has been scheduled for H.R. 9175.