Staking rewards are tokens you earn for locking up cryptocurrency to help validate a proof-of-stake network, either directly, through a validator, or through an exchange staking program. Under Revenue Ruling 2023-14 they are ordinary income at fair market value when you gain dominion and control, and that value becomes their cost basis for a later sale.
Staking creates two layers of tax that investors often collapse into one: income when the reward arrives, and capital gain or loss when it is later sold. Rewards paid in a token that then falls in value produce income you owe tax on and a capital loss you can only use when you sell. Exchange staking programs report income on Form 1099-MISC above $600; validator and DeFi staking report nothing, and both are taxable.
| Type | Income timing | Reporting | Self-employment tax |
|---|---|---|---|
| Exchange staking (Coinbase, Kraken) | When credited and transferable | 1099-MISC above $600 | No |
| Native staking via your own validator | When unbonded and transferable | Your records; no form | Only if run as a business |
| Delegated staking to a validator | When rewards are claimable | Your records; no form | No |
| Liquid staking (stETH, rETH) | Unsettled; no IRS guidance | Your records | No |
| Restaking and points programs | When tokens with value are controllable | Your records | No |
Yes. Under Revenue Ruling 2023-14 they are ordinary income at fair market value on the day you can transfer or sell them, whether or not you do.
As ordinary income at receipt, at your regular bracket, then as capital gain or loss when you later sell the tokens, measured from the value you reported as income.
Yes. The income event is receipt, not sale. Selling later is a second, separate event.
Exchanges issue Form 1099-MISC for rewards of $600 or more. Native, delegated, and DeFi staking produce no form, and the income is still reportable from your own records.
It is unsettled. Receiving stETH for ETH may itself be an exchange, and the accruing value may be income or gain depending on the token's design. No IRS guidance addresses it as of September 2026; we document the position taken.
Staking income across several networks and platforms needs a daily valuation record and a basis schedule for every reward lot. Gordon Tax builds that as part of a crypto tax return, and for heavy stakers, crypto tax planning sets the estimated payments so April is not a surprise.
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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