US Lawmakers Push to End Double Taxation on Crypto Staking Ahead of 2026
Bipartisan House momentum is building to change how the IRS taxes crypto staking rewards. Eighteen representatives led by Rep. Mike Carey asked the IRS to treat staking income on a realization basis — taxing rewards only when sold — to avoid what they call “double taxation,” reduce filing burdens, and encourage participation in proof-of-stake networks ahead of the 2026 tax year. Separately, Reps. Steven Horsford and Max Miller circulated a discussion draft of the Digital Asset PARITY Act proposing broader crypto tax reforms: a de minimis exemption for regulated stablecoin payments, up to five-year deferral for mining and staking income recognition, and extensions of wash-sale and certain securities tax rules to actively traded digital assets. Lawmakers asked the IRS to identify any technical constraints to updating guidance by end-2026. For traders, these proposals could materially lower immediate tax liabilities for staked assets, simplify reporting, and increase incentives to stake — potentially affecting supply dynamics and staking participation on proof-of-stake networks. Key SEO keywords: crypto taxation, staking rewards, IRS guidance, PARITY Act, proof-of-stake.
Neutral
The news is market-neutral overall but with mixed implications for proof-of-stake tokens. If enacted, shifting staking rewards to realization-based taxation and PARITY Act provisions (deferred recognition, stablecoin de minimis) would reduce immediate tax burdens and reporting friction for stakers. That could encourage more staking, reducing liquid supply of staked tokens and supporting prices over time (bullish pressure). In the short term, however, passage is uncertain and would likely take time to implement; legislative processes, IRS response, and technical constraints create uncertainty. Traders may react with modest speculation around POS assets, but absent immediate rule changes there is no direct, sudden price catalyst. Regulatory clarity could lower long-term selling by stakers and reduce forced liquidations tied to tax bills, which is constructive, yet enforcement or narrower-than-expected rules could blunt benefits. Therefore, expect cautious upside bias for staking tokens if reforms advance, but neutral near-term price impact until concrete policy changes occur.