IRS Says Crypto Staking is Taxable

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According to the US IRS, the rewards received from staking activities should be treated as ordinary income and be reported on a person’s tax return as such.

The agency rejected a legal argument from a couple, Joshua and Jessica Jarrett, who had filed a lawsuit claiming that staking rewards should not be taxed until the rewards are sold or exchanged.

The IRS pointed to Revenue Ruling 2023-14, which states that staking rewards must be included in a person’s gross income for the year in which they are received, as the basis for its decision.

However, the IRS maintains that these rewards are considered earnings and should be reported as income at their fair market value when received.