Staking Income Taxes: How Crypto Staking Is Taxed in 2026

Staking crypto earns rewards — and those rewards are taxable. The IRS, HMRC, and CRA all treat staking income as taxable income.

Here’s how to properly report your staking rewards.

How Staking Is Taxed

Every time you receive staking rewards, it’s taxed as ordinary income at fair market value.

When you sell the staked crypto, you pay capital gains tax on the difference between sale price and value when received.

Example	Amount
Received 1 ETH staking reward at $2,500	$2,500 income
Sold ETH later at $3,000	$500 capital gain
Total tax	Income tax on $2,500 + capital gains on $500

Let’s say you stake 32 ETH and receive 2 ETH in rewards over the year:

Month	Rewards (ETH)	ETH Price	Income
Jan	0.17	$2,500	$425
Feb	0.17	$2,600	$442
Mar	0.17	$2,700	$459
Apr	0.17	$2,800	$476
May	0.17	$2,900	$493
Jun	0.17	$3,000	$510
Jul	0.17	$2,900	$493
Aug	0.17	$3,100	$527
Sep	0.16	$3,200	$512
Oct	0.16	$3,300	$528
Nov	0.16	$3,400	$544
Dec	0.16	$3,500	$560
Total	2.0		$5,969

US tax at 24% marginal rate: $1,432

Form	Purpose
Form 1040	Report staking income as “Other Income”
Schedule 1	Line 8z for staking rewards
Form 8949	When you sell staked crypto
Schedule D	Capital gains summary

Form	Purpose
T1 Return	Report staking income
Line 12100	Interest and other investment income
Schedule 3	Capital gains when selling
T5008	Securities transactions

Mistake	Consequence
Not reporting staking income	IRS penalties + back taxes
Reporting only when selling	Underreporting income
Not tracking reward dates	Can’t calculate cost basis
Ignoring small amounts	All income is taxable
Using wrong cost basis	Overpaying or underpaying taxes

Key Point	Takeaway
Staking = income	Taxed when received, not when sold
Two tax events	Income tax + capital gains tax
Record everything	Date, amount, price for each reward
Report all amounts	Even small rewards are taxable
Use tax software	Auto-imports and calculates