House Advances Crypto Tax Package Without Key Mining Reward Deferral

Mining and Staking Deferral Falls Out of House Package

The US House of Representatives is moving forward with a comprehensive cryptocurrency tax package that addresses digital asset fees, stablecoins, and lending arrangements, but notably excludes a provision that has become central to mining and staking industry advocacy.

According to the House Ways and Means Committee, the legislative body will consider a 114-page bill called the Digital Asset Tax Certainty Act (H.R. 10357) during its Wednesday markup session. The committee published its notice on Monday outlining the package. While the legislation tackles several aspects of cryptocurrency taxation, it deliberately leaves unresolved one major request from miners and stakers.

The bill omits a provision that would have allowed miners and stakers to defer recognizing income from their rewards until they sell the underlying tokens. Currently, mining and staking rewards trigger tax obligations the moment they are received or come under the recipient’s control—a timing issue that can create significant liquidity challenges for mining operations and individual stakers who must pay taxes before liquidating their earnings.

Representative Mike Carey introduced the Tax Clarity for Mining and Staking Act in June, which included the deferral provision. That proposal would have let taxpayers choose between two approaches: recognizing newly minted tokens as income when received, or treating them similarly to self-created property and paying tax only when sold. Industry organizations including the Blockchain Association, Crypto Council for Innovation, and the Digital Chamber urged Congress to pass Carey’s bill exactly as introduced. These groups emphasized that taxing rewards before miners and stakers can liquidate them creates real operational challenges, particularly for smaller operations managing cash flow and tax obligations.

Provisions That Did Survive

Although the reward-deferral provision fell out of the final package, the bill retains several provisions relevant to mining and staking operations. The legislation classifies income derived from blockchain validator activities as ordinary income and establishes criteria for determining whether such income is sourced within or outside the United States. It also permits certain qualifying investment trusts to engage in staking digital assets without losing their trust status.

Beyond mining and staking specifics, the broader tax package addresses multiple cryptocurrency concerns. The bill prevents taxpayers from recognizing gains or losses when crypto is used to pay network transaction fees up to ten dollars. It proposes special tax treatment for qualifying US dollar stablecoins and allows qualifying digital asset loans to function without triggering taxation as a sale.

The package also includes simplified accounting rules for widely traded crypto assets, extends wash-sale and constructive-sale rules to cryptocurrency, and establishes a voluntary disclosure program for taxpayers seeking to correct earlier errors in digital asset tax reporting.

Broader Regulatory Context

The House action occurs as the Senate deliberates the CLARITY Act, which addresses how the Securities and Exchange Commission and Commodity Futures Trading Commission should divide regulatory oversight of the US crypto market.

This matters because clearer tax treatment of mining and staking rewards encourages participation in blockchain consensus activities, supporting the decentralized infrastructure underlying the entire crypto market.

Source: House Ways and Means Committee, via Cointelegraph. Not financial advice.