Staking rewards are earned when an individual stakes certain crypto to help validate transactions and support blockchain security. These rewards are often given in the same crypto they staked or another reward crypto for both liquid and illiquid staking.
How staking rewards are taxed
By default, CoinTracker treats staking rewards as taxable income, not capital gains. This follows the IRS guidance in Rev. Rul. 2013-14. When you sell your rewards, report the capital gains on Form 8949 and Schedule D.
You can update your CoinTracker settings to treat staking reward transactions as non-taxable. To change the default settings:
- Navigate to Settings.
- Click the Tax tab.
- Click Treat staking rewards as non-taxable, and toggle on.
- Select a start date.
- Select an end date (optional), then click Next.
- Review your selection and click Confirm & save to complete this process.
To turn off this setting, follow the above steps and toggle the feature off. We recommend consulting with a tax advisor before changing the default settings for tax treatment.
Additional considerations
When treated as non-taxable:
- Transactions will not be included in your income calculations for tax years after the effective start date.
- Receive transactions tagged as Staking reward will be assigned a $0 cost basis.
For more detailed staking tax guidance, refer to our Crypto Staking Tax Guide.
Using the staking reward category
CoinTracker automatically categorizes staking rewards transactions for most wallets, but you can also apply the Staking rewards category to Received transactions.
If you’re importing your transaction history via CSV, learn how to properly tag staking reward transactions and more.
Managing the display of staking rewards
You can hide or unhide staking reward transactions from your transaction history:
- Navigate to the Transactions page.
- Click Display.
- Toggle Hide staking rewards to hide these transactions.
To unhide, follow the same steps and turn off this setting.