US Plans to Tax Staking Income
In February 2023, the US Securities and Exchange Commission (SEC) filed a complaint against Kraken, a local cryptocurrency exchange, regarding the legality of its staking program.
The platform settled the issue by paying a $30 million fine. Following this, in July, a US court ordered Kraken to provide the Internal Revenue Service (IRS) with customer information, including names, dates of birth, addresses, phone numbers, and Tax IDs of those who have transacted more than $20,000 in a given calendar year.
Additionally, in March, President Joe Biden proposed levying taxes on approximately $24 billion related to cryptocurrency investments, and the Organization for Economic Cooperation and Development rolled out an amendment to a single standard for the exchange of tax information and systems to report on crypto assets.
Consequently, the IRS drafted a supplement to its regulations, declaring that rewards gained from staking coins in Proof-of-Stake networks must be included in the calculation of taxable income.
The fair market value of the validation fees received is to be taken into account when calculating taxable income in the taxable year in which the fee is obtained.
