House Republicans Urge IRS to Overhaul Crypto Staking Tax Rules Before 2025 Ends
Nineteen House Republicans sent a letter to Treasury Secretary Scott Bessent urging an immediate repeal of the 2023 IRS rule that taxes crypto staking rewards as income upon receipt. Instead, they advocate for staking rewards to be treated as capital property, taxed only when sold.
The current 2026 tax-year rules are set to be locked in 12 days from December 19, 2025, making prompt action critical. Representative Mike Carey (R-OH), who previously helped lead efforts to repeal Biden-era IRS rules requiring decentralized finance (DeFi) platforms to collect and report taxpayer information, spearheaded this push.
In their letter, the group argued that taxing staking rewards only when sold would reduce administrative burdens and lower the risk of overtaxation, which could otherwise discourage participation in staking.
Staking rewards originate from proof-of-stake blockchain networks, where users lock up tokens such as Ethereum (ETH) to help secure the network and earn additional tokens over time. The Treasury recently approved Wall Street-traded crypto products capable of generating staking rewards for investors, enhancing their appeal.
The Trump administration has shown willingness to overhaul staking tax rules for individual investors without congressional involvement. Additionally, a crypto tax bill is being drafted for next year, and undoing the current staking guidance could streamline that process.
Bo Hines, the former executive director of Trump's crypto working group who departed the White House in August for a role at Tether, is cited as instrumental behind these recent efforts.
