Staking Rewards — When Do You Owe Tax?

Staking rewards are taxable as ordinary income in the year you receive them, based on the fair market value of the coins at the time they land in your wallet — the IRS made this clear in Revenue Ruling 2023-14.

This applies whether you're staking directly on a blockchain like Ethereum or through an exchange like Coinbase that handles the staking for you.

The value you report as income also becomes your cost basis in those coins, so when you later sell them, you'll only owe capital gains tax on any appreciation above that amount.

A common mistake is waiting until you sell the rewards to report them — by then you may be underreporting income from a prior year and overstating gains from the current year.

You'll need to track the exact date and value each time you receive staking rewards, which can be tedious if you're receiving them daily or weekly, but it's required for accurate reporting.