Decrypt reports that the Internal Revenue Service (IRS) has issued a new ruling stating that cryptocurrency staking rewards must be reported as part of a taxpayer's gross income. The Revenue Ruling 2023-14 outlines that staking rewards, along with all other income forms, must be reported in the year they are received. This applies to both taxpayers staking cryptocurrency directly or those staking through centralized crypto exchanges.
Staking, a process of participating in proof-of-stake (PoS) consensus mechanisms, allows users to lock up funds to support the network's operations and receive newly minted tokens as rewards. The new ruling requires taxpayers to calculate the fair market value of crypto rewards at the time they receive them and add this value to their annual income for the relevant tax year.
