US House Crypto Tax Package Advances Without Mining and Staking Reward Deferral

Omission of Mining and Staking Reward Deferral

The Digital Asset Tax Certainty Act (H.R. 10357), published alongside the committee’s markup notice on Monday, does not include the reward-timing provision found in Representative Mike Carey’s Tax Clarity for Mining and Staking Act introduced in June.

This means miners and stakers will be taxed on newly created tokens as soon as they are received or come under the recipient's control, rather than deferring taxes until the tokens are sold. Such a framework may impose tax obligations on participants who do not immediately liquidate their rewards.

Retention and Clarification of Mining and Staking Tax Rules

Although the deferral provision was omitted, the package retains aspects of mining and staking regulations. Income from blockchain validator activities will be treated as ordinary income, with clear guidelines on whether this income is sourced domestically or internationally.

Furthermore, qualifying investment trusts will be allowed to stake digital assets without losing their status as trusts, an important consideration for institutional investors.

Other Key Provisions in the Package

The bill prevents taxpayers from recognizing gains or losses when cryptocurrency is used to pay network or transaction fees up to $10, aiming to simplify the tax treatment of small transactions.

It also proposes special tax treatment for qualifying US dollar stablecoins and permits qualified digital asset loans without classifying them as taxable sales.

Additional measures include simplified accounting for widely traded crypto assets, the extension of wash-sale and constructive-sale rules to the crypto market, and the establishment of a voluntary disclosure program for taxpayers wishing to amend prior digital asset tax violations.

Industry Response and Next Steps

In June, the committee circulated seven draft proposals addressing cryptocurrency taxation, covering topics such as stablecoins, mining, staking, and aims to reduce the reporting burden for crypto transactions.

Industry groups such as the Blockchain Association, Crypto Council for Innovation, and Digital Chamber urged Congress to pass Carey’s legislation as initially introduced, warning that taxing rewards upon receipt poses liquidity issues for miners and stakers.

They also opposed an amendment that would have limited the tax deferral to five years.