In a nutshell: In both the US and Canada, crypto staking rewards are generally taxed as income at their fair market value when you receive them (in the US, when you can actually sell or move them). Later, when you sell or trade those rewards, any price change since then is a separate capital gain or loss. Educational only; not financial or tax advice.
Last updated: October 10, 2026.
Staking feels passive: you lock up ETH, SOL or ADA and new coins show up in your account. But tax agencies see those new coins as something you earned, and that has two consequences. You may owe tax on rewards you never sold, and you need a record of each reward’s value so you do not pay tax twice when you sell. This guide explains how crypto staking taxes work for US and Canadian holders, with a simple worked example and a record-keeping checklist. If you are new to staking itself, start with our guide to what staking in crypto is.
Table of contents
Crypto Staking Taxes: The Short Answer
Staking creates two separate tax moments:
- When you receive the reward. The fair market value of the coins on that day is ordinary income. That value also becomes your cost basis in those coins.
- When you sell, trade or spend the reward. The difference between the sale price and that cost basis is a capital gain or loss, just like any other crypto sale.
Simply staking coins you already own (locking or delegating them) is generally not a sale. The tax question is about the new coins you earn, not about the act of staking. For how the second step works, see our guide to crypto capital gains tax.
US Rules: IRS Revenue Ruling 2023-14
The clearest US guidance is IRS Revenue Ruling 2023-14, published in July 2023. It says that a cash-method taxpayer who receives validation rewards from proof-of-stake staking must include the fair market value of those rewards in gross income in the year they gain “dominion and control” over them, meaning the date they are able to sell, exchange or otherwise dispose of the coins.
The ruling also covers people who stake through a crypto exchange, not only those who run their own validator. In practice that means:
- If rewards land in your account and you can move or sell them right away, the income date is the day they arrive.
- If rewards are locked by the protocol and you cannot touch them, the ruling ties income to the date you gain control, not the date they were technically earned.
- The amount is the fair market value in US dollars on that date.
The IRS digital assets page also lists “mining, staking and similar activities” among the reasons you must answer “Yes” to the digital asset question on Form 1040.
A Worked Example
These numbers are hypothetical and only show the mechanics:
| Event | Details | Tax effect |
|---|---|---|
| March: reward received | 0.1 ETH credited, ETH worth $3,000 that day | $300 of ordinary income; cost basis of this 0.1 ETH = $300 |
| June: reward received | 0.1 ETH credited, ETH worth $2,500 that day | $250 of ordinary income; basis = $250 |
| November: you sell 0.2 ETH | Sale price $3,200 per ETH = $640 | Capital gain of $640 − $550 = $90 (short-term, held under a year) |
Total income in this example is $550 from rewards plus a $90 gain. Without records of the March and June values, you might wrongly treat the full $640 as gain and pay tax on the same money twice. If prices had fallen instead, the sale would create a capital loss that can offset other gains, which is the idea behind crypto tax loss harvesting.
Which US Forms Are Used
According to the IRS:
- Staking income for most individuals is reported on Form 1040, Schedule 1 (Additional Income and Adjustments to Income).
- If staking is part of a business you run as a sole proprietor, digital asset business income goes on Schedule C.
- Later sales of staked rewards are reported on Form 8949, which flows to Schedule D.
Brokers now report digital asset sales on Form 1099-DA. Note that the IRS says the broker reporting exception for certain transactions, including staking transactions, does not apply to the rewards earned from them, and your obligation to report reward income exists whether or not you receive a form.
Canada Rules: CRA
The Canada Revenue Agency’s page on mining and staking income says rewards from staking crypto-assets on a centralized exchange platform will generally be considered income under the Income Tax Act at the time the rewards are credited to your wallet on the platform.
Whether that income is business income or income from property depends on your level of activity and overall conduct. Running validator nodes at scale points more toward business; occasional staking through an app is usually treated differently. The CRA’s crypto tax obligations page lists staking rewards as an acquisition you must value for tax purposes, and later disposals of those coins are reported as a capital gain or business income as usual. Our guide to cryptocurrency tax in Canada covers the capital gains side.
Exchange Staking, Liquid Staking and Restaking
- Exchange staking (for example, staking through a large US or Canadian platform) is the simplest case: the platform credits rewards, and both the IRS ruling and CRA guidance address it directly.
- Running your own validator follows the same income rule, but you are responsible for tracking every reward yourself.
- Liquid staking (receiving a token such as stETH) is less settled. Revenue Ruling 2023-14 does not specifically address swapping a coin for a liquid staking token, so whether that swap is itself a taxable trade is a question to raise with a tax professional.
- Restaking adds extra reward streams and points programs, which multiply the number of income events you may need to track.
Records to Keep
Good records are the difference between a simple return and paying tax twice. For every reward, keep:
- The date and time it was credited or became available to you.
- The coin and quantity.
- The US dollar or Canadian dollar value at that moment, and the price source you used.
- The wallet or platform it landed in.
- Any fees paid, and the date and price when you later sell or trade the coins.
Download exchange reward histories regularly. Platforms close, change products, or limit old data, and the CRA’s tax tips specifically recommend downloading your original data at regular intervals.
Common Mistakes
- Only reporting when you sell. Reward income is generally due in the year received, even if you never cash out.
- Using a zero cost basis. Rewards you already reported as income have a basis equal to that income amount.
- Ignoring small daily rewards. Many networks pay frequently; small amounts still add up over a year.
- Assuming no form means no tax. You must report income whether or not a platform sends you a tax form.
FAQ
Are staking rewards taxable if I never sell them?
Generally yes. In the US the income arises when you gain control of the rewards, and in Canada when they are credited to your account, not when you sell.
Is staking itself a taxable event?
Locking or delegating coins you already own is generally not treated as a sale. The rewards you receive are what is taxed.
What value do I use for each reward?
The fair market value in your local currency at the time you received it. Use a consistent, reputable price source and keep a note of it.
Do I pay tax twice on staking rewards?
No, if you track basis correctly. The value you report as income becomes your cost basis, so only the later price change is taxed when you sell.
Does the wallet I use change the tax?
Not the basic rule. Rewards are taxed the same whether you stake on an exchange or from a self-custody wallet; self-custody just means you keep the records yourself.
Sources
- IRS: Revenue Ruling 2023-14
- IRS: Digital assets
- IRS: About Form 8949
- IRS: About Form 1099-DA
- CRA: Reporting income from crypto-asset mining and staking
- CRA: Understanding crypto-assets and your tax obligations
- CRA: Reporting crypto-asset income as a business
Educational content only. This is not financial, legal, tax or investment advice. Tax rules change; talk to a qualified tax professional about your situation.
