U.S. Rep. Mike Carey (R-OH) sponsored legislation on June 8 aimed at changing how certain cryptocurrency activities are taxed, arguing that the current rules are difficult for taxpayers to follow and administer.
The proposed Tax Clarity for Mining and Staking Act, H.R. 9175, would address tax treatment for people who earn digital assets through mining and staking — two common ways cryptocurrency networks operate and validate transactions.
According to Rep. Carey, the bill is intended to keep digital asset innovation in the United States, create clearer tax rules for individuals earning rewards through mining and staking, and give investors more flexibility to use digital assets on blockchain networks.
“American taxpayers currently face a digital asset tax landscape that is burdensome to comply with and difficult to administer,” Rep. Carey said. “The current tax treatment of mining and staking rewards fails to accurately reflect the underlying technological and economic realities of mining and staking and diverges from foundational principles of tax law.
“The Tax Clarity for Mining and Staking Act will help support American innovation in digital assets and ensure that miners and stakers in the United States are treated fairly,” added the congressman.
Under H.R. 9175, newly created digital assets would continue to be treated as ordinary income when acquired, but taxpayers would have the option to treat those assets similarly to self-created property for tax purposes.
The legislation would also allow grantor trusts that hold digital assets to receive staking rewards without affecting their tax status, consistent with existing Internal Revenue Service guidance, according to a bill summary provided by Rep. Carey’s staff.
The measure has been referred for consideration to the U.S. House Ways and Means Committee, where committee chairman U.S. Rep. Jason Smith (R-MO) supports the bill.
“I commend Rep. Carey for standing up for taxpayers and providing greater clarity while helping maintain a robust digital asset economy in the United States,” said Rep. Smith.