How Much Tax Do You Pay on Crypto in the US? (2026 Guide)

The IRS taxes cryptocurrency at rates ranging from 0% to 37%, depending on two things: how long you held the asset and how you got it in the first place. There is no single flat "crypto tax rate." Selling Bitcoin you bought two years ago is taxed completely differently than a staking reward you received last week, even if both are worth the same amount in dollars.

This guide breaks down exactly how much tax you pay on crypto in the US for 2026, including the federal brackets, the 3.8% Net Investment Income Tax that catches higher earners, how mining and staking income is treated, and a full worked example that layers salary, short-term gains, and long-term gains together. If you are looking for the step-by-step mechanics of filling out Form 8949 and Schedule D, our full guide to reporting crypto earnings covers that in detail.

Do You Have to Pay Taxes on Crypto?

Yes, but only when a taxable event happens. The IRS treats cryptocurrency as property, not currency, which means the same tax principles that apply to stocks or real estate apply to your crypto. Simply buying crypto with dollars and holding it triggers no tax at all, and transferring coins between your own wallets is not a taxable event either.

What does trigger tax: selling crypto for cash, trading one coin for another, spending crypto on goods or services, and earning crypto through staking, mining, or airdrops. Each of those actions either realizes a capital gain or loss, or creates ordinary income at the moment you receive the asset.

Learn more: do you have to report crypto on taxes if you don't sell

How Is Crypto Taxed? Two Categories, Not One

Nearly every question about crypto tax comes down to which of two buckets a transaction falls into: capital gains or ordinary income. Understanding which bucket applies is the single most useful thing you can learn before doing your own tax math.

Capital Gains Tax: When You Sell, Swap, or Spend Crypto

Capital gains tax applies whenever you dispose of crypto you already own. That covers selling for US dollars, trading one cryptocurrency for another, and spending crypto to pay for goods or services. Your gain or loss is the difference between what you received and your adjusted basis, which is generally what you originally paid for the asset. How long you held it before disposing of it determines which rate applies, short-term or long-term, and that distinction is big enough to deserve its own section below.

Ordinary Income Tax: When You Earn Crypto

Ordinary income tax applies whenever you receive crypto as earnings rather than buying it outright. Staking rewards, mining rewards, and airdrops are all taxed at their fair market value on the day you receive them, taxed at your regular income tax rate rather than a capital gains rate. If you later sell that same crypto, a second, separate taxable event occurs: a capital gain or loss measured against the value you already reported as income.

Short-Term vs. Long-Term Capital Gains Tax on Crypto

The one-year mark is the most consequential date on a crypto investor's calendar. Cross it before selling, and your tax rate can drop by more than half.

Short-Term Capital Gains Rate (Held One Year or Less)

If you sell, swap, or spend crypto within a year of acquiring it, the gain is short-term and gets taxed at your ordinary federal income tax rate, the same brackets that apply to your salary. For 2026, that means a rate anywhere from 10% to 37%, stacked on top of whatever else you earned that year. There is no discount for short-term crypto gains: the IRS treats them exactly like wage income.

Long-Term Capital Gains Rate (Held More Than One Year)

Hold the same asset for more than a year before disposing of it, and the gain qualifies for the lower long-term capital gains rate instead, either 0%, 15%, or 20% depending on your total taxable income. This is the single biggest lever most crypto investors have over their own tax bill, and it costs nothing but patience.

2026 Long-Term Capital Gains Thresholds

These 2026 thresholds are based on your total taxable income, not just the gain itself, and they are adjusted for inflation each year.

2026 Federal Tax Brackets for Crypto

Short-term crypto gains and staking, mining, or airdrop income all flow through the same seven federal brackets that apply to every other kind of income you earn. Here is where those brackets land for the 2026 tax year, following the inflation adjustments the IRS issued under Revenue Procedure 2025-32.

2026 Federal Income Tax Brackets (Single Filers)

2026 Federal Income Tax Brackets (Married Filing Jointly)

Remember that these are marginal brackets. Only the portion of your income that falls inside a given bracket is taxed at that bracket's rate, so a short-term crypto gain that pushes you into a higher bracket does not raise the rate on everything you earned below that line.

The 3.8% Net Investment Income Tax (NIIT)

If you are a high earner, there is an extra layer on top of the rates above. The Net Investment Income Tax adds a flat 3.8% on top of your regular capital gains tax once your income crosses a set threshold, and crypto capital gains count as net investment income for this purpose.

NIIT applies to the lesser of your net investment income or the amount by which your modified adjusted gross income, or MAGI, exceeds the threshold for your filing status. Those thresholds are not indexed for inflation, so more taxpayers become subject to NIIT every year as incomes rise.

Say a single filer has a MAGI of $230,000 for the year, including $40,000 of net crypto capital gains. The excess over the $200,000 threshold is $30,000. NIIT applies to whichever figure is smaller, the $40,000 of investment income or the $30,000 excess, so the tax is 3.8% of $30,000, or $1,140, on top of the regular capital gains tax already owed on the gain.

How Staking, Mining, and Airdrop Rewards Are Taxed

Crypto you earn is taxed differently from crypto you buy and sell, and the three most common ways people earn it each come with their own wrinkles.

Staking Rewards

Staking rewards are ordinary income at the fair market value of the coins on the day you gain control of them. If the reward later grows in value before you sell it, that additional gain is taxed separately as a capital gain. Our dedicated guide on crypto staking taxes covers the reporting mechanics and common edge cases in full.

Mining Rewards: Hobby vs. Trade or Business

Mining income is taxed the same way regardless of scale: the fair market value of the coins on the date you receive them counts as gross income. What changes is whether you can deduct your costs against that income, and the answer hinges on a distinction the IRS has drawn since 2014.

A miner whose activity rises to the level of a trade or business reports net earnings on Schedule C and pays self-employment tax on the profit. Electricity, hardware, and other mining costs are deductible against that income. A hobby miner owes ordinary income tax on the full value of the coins received with no self-employment tax, but also cannot deduct those same costs. That gap widened in 2025: the One Big Beautiful Bill Act permanently eliminated the scheduled restoration of miscellaneous itemized deductions. Hobby expenses such as electricity and hardware costs fall into that category. In practice, a hobby miner today has no path to deduct electricity or hardware costs at all, while a business-classified miner still can. For the full breakdown of this distinction and how to document which side of the line you fall on, see our guide to crypto mining taxes.

Airdrops

Airdropped tokens are ordinary income at fair market value on the date you receive them and gain dominion and control over the asset, the same standard applied to staking rewards. Selling the tokens later triggers a separate capital gain or loss measured against that same receipt-date value. Our airdrop tax guide walks through how to track and report these events.

Worked Example: How Much Would You Actually Owe?

Numbers make this easier to follow than rules alone. Here is a single filer with a salary, a short-term crypto gain, and a long-term crypto gain, all in the same 2026 tax year.

Total gross income is $113,000. Subtracting the 2026 single standard deduction of $16,100 from the ordinary income portion leaves $81,900 in taxable ordinary income, which is taxed progressively through the brackets above: $1,240 in the 10% bracket, $4,560 in the 12% bracket, and $6,930 in the 22% bracket, for $12,730 in tax on the salary and short-term gain combined.

The $15,000 long-term gain stacks on top for rate purposes, bringing total taxable income to $96,900, which sits comfortably inside the 15% long-term capital gains bracket. That gain is taxed at 15%, or $2,250. Total federal tax for the year comes to roughly $14,980, an effective rate of about 13.3% on the full $113,000. Because total income stays well below the $200,000 NIIT threshold, no Net Investment Income Tax applies in this scenario.

Does Your State Add Its Own Crypto Tax?

Federal rates are only half the picture. Where you live can add anywhere from nothing to over 13% more on top.

Eight states currently levy no individual income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Crypto gains realized by residents of those states face no additional state tax, only the federal rates covered above.

Washington has no general income tax either, but is a partial exception for larger gains: the state imposes a 7% excise tax on long-term capital gains above a standard deduction adjusted annually for inflation. The 2025 figure is $278,000. WA DOR publishes each year's updated amount before the April filing deadline. There is also an additional 2.9% on gains above $1 million, bringing the combined rate to 9.9% at that level. On the other end of the spectrum, California taxes ordinary income and capital gains alike at its regular rates, which top out at 12.3%, plus an added 1% Mental Health Services Tax on income above $1 million, for an effective top rate of 13.3%, the highest of any state.

How to Lower Your Crypto Tax Bill

None of these strategies are loopholes. They are ordinary tax planning tools that happen to apply well to crypto.

Holding an asset past the one-year mark before selling is the single most effective move, since it can cut your rate on that gain roughly in half. Beyond that, selling losing positions to offset gains, known as tax-loss harvesting, is especially powerful for crypto because the wash-sale rule that blocks this strategy for stocks currently does not apply to digital assets.

Net capital losses beyond your gains can offset up to $3,000 of ordinary income per year, with any remainder carried forward indefinitely to future tax years. Our guides on reducing your crypto taxes and crypto tax-loss harvesting go into much more depth on both approaches.

How to Report and Calculate Your Crypto Taxes

Every capital gain or loss gets reported on Form 8949 and summarized on Schedule D, while income from mining, staking, or airdrops goes on Schedule 1 or Schedule C depending on whether it rises to a trade or business. All of it eventually flows into your Form 1040, where you must also answer a direct yes-or-no question about digital asset activity for the year.

Doing this by hand across dozens or hundreds of transactions gets error-prone fast, which is exactly the gap crypto tax software is built to close. CoinTracking has tracked crypto portfolios and generated tax reports for over 14 years, importing transaction history from 400+ exchanges and calculating short-term versus long-term gains automatically for each lot. For the complete walkthrough of which forms to file and how the reporting mechanics work, see our full guide on US crypto taxes.

Conclusion

Getting the numbers right before you sell is worth the effort. CoinTracking imports your full transaction history, separates short-term from long-term lots automatically, and generates IRS-ready reports for Form 8949 and Schedule D.