Yes — and the rule surprises people. In the US, crypto you earn — from staking, DePIN devices like DIMO and Helium, mining, or airdrops — is taxable income the day you receive it, even if you never sell. Here's how it works, how to value it, and how to report it.
When the tax hits
Taxable when
| When | What is taxed | As what |
|---|---|---|
| Rewards land and you can use them | Dollar value that day | Ordinary income |
| You sell later for more | The increase since that day | Capital gain |
| You sell later for less | The drop since that day | Capital loss |
| You never sell | Still the value on the day they landed | Income — holding does not erase it |
What counts
What counts as an "earned" reward
The income-at-receipt rule applies broadly to crypto you receive rather than buy:
- Staking rewards — from staking ETH, SOL, ATOM and others.
- DePIN rewards — DIMO, Helium (MOBILE), Hivemapper (HONEY) and similar device earnings.
- Mining rewards — block rewards and fees.
- Airdrops — tokens dropped to your wallet that you can control.
- Referral, liquidity and reward-program payouts, and being paid in crypto.
The rule
The rule, in plain English
When rewards land in your wallet, the IRS treats them like getting paid. You owe income tax on their dollar value that day — the moment you can actually use, sell, or move them. This mirrors how mining and staking have long been handled and is spelled out in IRS Revenue Ruling 2023-14. There's no "wait until I cash out" — receiving the tokens is the taxable moment.
Two events
The part that catches people out: two taxable events
Earning and selling are taxed separately:
- When you earn: income tax on the tokens' value the day you got them. That value also becomes your cost basis.
- When you sell: capital gains tax if the price rose since you received them, or a deductible loss if it fell.
So if you earn $5 of rewards and later sell for $7, you're taxed on the $5 as income and on the $2 gain separately. Earn $5 and sell for $3? You report $5 of income and a $2 loss.
Valuing drops
How to value your rewards
Use the fair market value of the tokens in US dollars at the time you received them — typically the price on the date (and ideally time) they hit your wallet and became yours to control. That dollar figure is both your reported income and your cost basis for later. With rewards arriving constantly at changing prices, this is exactly the bookkeeping that trips people up — and what software automates.
Hobby or business
Hobby or business? It changes how you report
Most people earning casual staking or DePIN rewards report them as other income on Schedule 1. But if you operate at scale — multiple devices, real effort, a clear profit motive — the IRS may treat it as a business (Schedule C). Business treatment lets you deduct costs like hardware and electricity, but adds self-employment tax. Which applies depends on your facts; if you're running several devices, it's worth asking a tax professional.
Forms
How to report it
The income portion goes on Schedule 1 (or Schedule C if it's a business). When you later sell the tokens, the gain or loss goes on Form 8949 and Schedule D, using the value at receipt as your cost basis. And answer the digital-asset question at the top of your return honestly. (For the bigger picture, see do you pay tax on crypto?)
Tiny weekly drops
Why small rewards make this genuinely annoying
DePIN and staking rewards often arrive in tiny amounts, every week, each needing a dollar value recorded — 52+ little income events per source per year, with no minimum below which you can ignore them. Doing that by hand, with prices that change constantly, is a real chore.
This is what crypto tax software is built for: connect the wallet that receives your rewards, and it pulls in every reward, values it on the right date, and produces a filable report. For small, frequent rewards, it's the difference between an afternoon of spreadsheets and a few clicks. We compared the main options in best crypto tax software.
Sources: IRS — Digital Assets · Rev. Rul. 2023-14 explained (CoinLedger) · Crypto staking taxes 2026 (TokenTax)