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A bipartisan group of US lawmakers is pressing federal tax officials to review how crypto staking rewards are taxed, with the goal of updating guidance before the 2026 tax year. The effort reflects growing concern in Congress that current rules do not match how staking works in practice and may discourage participation across proof-of-stake (PoS) networks.
In a letter sent to the Internal Revenue Service acting commissioner Scott Bessent, 18 House members led by Mike Carey asked the agency to review what they call “burdensome” treatment of staking rewards. The lawmakers argue that taxing rewards when they are received, and again when they are sold, overstates actual gains and creates avoidable compliance pressure.
UndIRer current guidance, staking rewards are treated as taxable income at the moment they are credited to a wallet. When those same tokens are later sold, capital gains tax may apply again. Carey and his colleagues say this structure forces you to track price changes on assets you may not intend to sell for months or years.
Their request centers on taxing rewards at the time of sale. In their view, that approach better reflects economic reality by tying taxes to realized value rather than paper gains that can shift with market prices. The letter asks whether administrative barriers exist to making such a change before the next tax cycle begins.
The letter was first reported by Decrypt on December 19, 2025.
The lawmakers frame staking as more than a personal investment choice. They point out that millions of Americans hold tokens on proof-of-stake networks and that those networks rely on stakers to function securely. From that perspective, current tax rules may discourage behavior that supports blockchain infrastructure.
For you as a taxpayer, the issue comes down to predictability. Being taxed on rewards before you have liquidity to cover the bill can create risk, especially during volatile periods. Lawmakers say that risk, combined with record-keeping demands, keeps some holders on the sidelines.
The Carey letter is not the only attempt to adjust crypto tax treatment. Representatives Max Miller and Steven Horsford have circulated a separate discussion draft that takes a narrower path. Their proposal would allow you to defer income recognition on staking or mining rewards for up to five years instead of facing immediate taxation.
That approach stops short of changing when rewards are taxed outright. It signals that lawmakers are still weighing options as 2026 approaches. For now, the IRS has not said whether it plans to revisit its staking guidance, leaving the outcome uncertain as the next tax year draws closer.
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