Are Staking Rewards Taxable? US, UK and Canada Rules Explained
Staking creates two kinds of tax events: the moment you receive rewards, and the moment you later dispose of those rewards. Getting both right avoids paying tax twice — or not at all when you should.
United States
In Revenue Ruling 2023-14, the IRS stated that staking rewards are included in gross income in the year the taxpayer gains dominion and control over them — generally when you can sell, exchange or otherwise transfer them. The amount included is the fair market value at that time.
Example: you receive 0.05 ETH in staking rewards when ETH is $3,000. You report $150 of ordinary income. Your cost basis in that 0.05 ETH is $150, and its holding period starts the next day.
If you later sell that 0.05 ETH for $200, you have a $50 capital gain — short-term or long-term depending on how long you held it.
Rewards are taxed at ordinary income rates. If staking is a trade or business, self-employment tax may also apply.
Run your own numbers with the free calculator: Staking APY Calculator
Open calculator →United Kingdom
HMRC's guidance is that staking returns are usually taxed as income — generally miscellaneous income for individuals — based on the pound value when received, unless the activity amounts to a trade. Some arrangements may instead be treated as capital, depending on how the staking works. When you later dispose of reward tokens, CGT applies, using the income value as their cost.
UK individuals have a £1,000 trading allowance and other allowances that may apply in some circumstances; check HMRC's Cryptoassets Manual for your situation.
Canada
The CRA generally treats staking rewards as income at their fair market value when received. If staking is carried on as a business, the income is business income. The value included in income becomes the cost of the tokens, added to your adjusted cost base. Later dispositions create a capital gain or loss (or business income).
Why cost basis matters
If you forget to record the value of rewards when received, you might later treat their cost as zero, and pay capital gains tax on the full sale value — taxing the same value twice.
| Step | Value | Tax |
|---|---|---|
| Receive 100 tokens at $2 | $200 | Income tax on $200 |
| Sell 100 tokens at $3 | $300 | Capital gain on $100 ($300 − $200 basis) |
Practical record-keeping
- Record each reward: date, quantity and market value in your tax currency.
- For frequent rewards (daily or per epoch), use tax software or exports from your platform.
- Keep track of which wallet or account received each reward.
- Note any lock-up that prevented you from accessing rewards, which can affect when they are taxed in the US.
Planning tips
- Set aside part of each reward for income tax, especially in a year of high prices.
- Remember that income tax is due on the value at receipt even if the price later falls.
- Losses on reward tokens can offset other capital gains when you sell.
Estimate your rewards first
Use the staking APY calculator to estimate the number and value of tokens you will receive, then apply your income tax rate to plan ahead. For later sales, the crypto tax calculator estimates the capital gains tax.
CryptoMathly provides educational estimates only and is not financial, investment or tax advice. Crypto assets are volatile and you can lose money. Always verify figures with a qualified professional.