The House Ways and Means Committee has advanced the Digital Asset Tax Certainty Act by a 38-5 vote, giving cryptocurrency tax legislation a path to the full House even as a separate market-structure bill stalled in the Senate. The measure would establish targeted tax treatment for small network fees, mining, staking and wash sales, though its prospects for a House floor vote remain uncertain before lawmakers leave Washington for the November elections.
The committee-approved bill would exempt certain cryptocurrency network and transaction fees of $10 or less from taxation when paid by individuals. The provision is designed to reduce record-keeping burdens for small on-chain actions, such as paying a network fee to move tokens, but it would not cover service providers making transactions for customers.
The exemption would begin in December 2027 rather than immediately, giving the Treasury Department and taxpayers time to prepare for the new rules. The bill also limits the relief for high-frequency activity: individuals making more than 5,000 transfers in a year would not qualify for the small-fee waiver under the current text.
Tax reporting provisions move ahead as Senate market bill stalls
The committee vote came less than a day after the Senate failed to clear its first procedural hurdle for the Clarity Act, a broader digital-asset oversight proposal. The Senate motion failed by a 50-49 vote, leaving the legislation short of the support needed to move forward.
Democrats cited ethics concerns related to President Donald Trump’s cryptocurrency interests, which they said had grown to hundreds of millions of dollars. The procedural defeat places the Senate’s wider framework for cryptocurrency markets on hold, while the House tax bill has secured bipartisan committee support.
Representative Lloyd Doggett, a Democrat from Texas and a member of the Ways and Means Committee, criticized the tax proposal during the panel’s debate. Doggett said the bill would provide “billions” of dollars in tax breaks for the cryptocurrency industry and argued that wealthy token holders and the Trump family could benefit.
Supporters of the measure have focused on the absence of tailored federal tax rules for common digital-asset activities. The bill does not overhaul the tax system for cryptocurrency trading, but it would create more specific treatment for several areas that have remained disputed or operationally difficult for taxpayers.
Mining and staking remain taxable as income
The legislation states that mining and staking rewards would be treated as ordinary income. Mining involves using computing equipment to validate transactions on certain blockchains, while staking generally involves locking up or delegating tokens to help secure a proof-of-stake network in return for rewards.
A previous version of the proposal included an option to defer recognition of income from mining and staking. That provision was removed before the committee vote. As currently written, the bill does not specify the exact point at which mining and staking rewards must be recognized for tax purposes, leaving a central implementation question unresolved.
The draft also seeks to preserve the tax status of some investment trusts that stake digital assets they hold. Under the bill, staking activity by itself would not cause an eligible trust to lose its existing tax classification. That provision could be relevant to products structured to hold tokens on behalf of shareholders, particularly where the trust’s ability to generate staking rewards might otherwise create tax complications.
The Treasury Department would also be required to create a Digital Asset Voluntary Disclosure Program within 12 months of the bill becoming law. Eligible taxpayers could amend previous tax returns through the program and pay outstanding tax, interest and penalties.
The proposal gives taxpayers a route to address earlier filings as cryptocurrency reporting obligations become more detailed. Its eventual usefulness would depend heavily on Treasury’s eligibility rules, penalty treatment and the records taxpayers can provide for historic token activity.
Wash-sale rule would close a common tax-planning strategy
The committee-approved draft would apply wash-sale rules to virtual assets. Under a wash-sale rule, a trader cannot claim a tax loss from selling an asset and then immediately repurchasing the same or a substantially identical asset.
Traditional securities are already subject to wash-sale restrictions, but cryptocurrency has generally not been covered by those rules. Extending them to virtual assets would restrict a strategy in which traders sell tokens at a loss to reduce taxable gains and quickly buy back the same holdings to maintain market exposure.
The bill’s language applies the restriction broadly across virtual assets, potentially changing year-end tax planning for active cryptocurrency traders. It also reinforces the need for detailed transaction histories, especially for people trading across multiple wallets, platforms and blockchain networks.
Two proposed changes did not survive the committee’s review. A proposal to study green-energy use in the cryptocurrency sector failed in a 16-25 vote. Another amendment concerning reporting rules for decentralized platforms was rejected by a 12-28 vote.
Floor schedule leaves bill’s next step unclear
The committee approval does not guarantee a vote by the full House. Lawmakers are scheduled to leave Washington until after the November elections, creating a narrow and uncertain window for House leadership to bring the measure forward.
Attention may now move to the Senate Finance Committee, which has indicated interest in digital-asset tax legislation. Any final federal framework would require agreement between the House and Senate, and the Senate’s failure to advance the Clarity Act shows that cryptocurrency policy remains politically vulnerable even where individual tax provisions attract cross-party support.
For taxpayers, the current bill is a reminder that record-keeping requirements are likely to become more central to digital-asset compliance. The $10 fee exemption could eventually simplify treatment of small transactions, but it would arrive years after enactment and would come with annual transfer limits. Meanwhile, the bill’s approach to wash sales, voluntary disclosures and ordinary-income treatment for block rewards would place greater weight on accurate historical trading and wallet records.
For deeper insight into U.S. crypto regulation shifts shaping markets, explore the possible future of crypto regulation in the US.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
