Are crypto staking rewards and airdrops taxed as income?

The basic rule

When you receive crypto as income, the income is the number of units times their value when you receive them.^6,3

In short: income = units received × value of one unit when received.⁶

That same value then becomes your cost basis for the units. When you sell them later, you work out a gain or loss from that figure.^2,7

Being paid in crypto

In the US, crypto you receive for work is ordinary income at its fair market value in dollars when received.⁶ The IRS says this is so whether or not you are an employee.⁶ Crypto paid as wages is treated like any other wages for employment taxes.⁸

In the UK, crypto paid by an employer counts as earnings. If the tokens can easily be turned into cash, as bitcoin can, the employer must run Income Tax and National Insurance through PAYE, the payroll system.⁷

Staking

Staking means locking up coins to help run a proof-of-stake blockchain, in return for new coins as rewards.^1,9

US. In Revenue Ruling 2023-14, published in August 2023, the IRS said staking rewards count in your income in the year you gain "dominion and control" over them. That means the moment you can sell, swap or otherwise dispose of them. The value is taken at that date and time.¹ The ruling is written for taxpayers who use the cash method of accounting, and says the same applies when you stake through an exchange.¹

In the ruling's example, a person receives 2 coins as rewards, but cannot sell or move them until a short lock ends. The income is counted once the lock is over and the person can sell them (in the ruling, the day after the lock period ends), at their value at that date and time.¹

In a memorandum opinion in June 2026, the US Tax Court ruled against a couple who said their Cardano staking rewards, received through an exchange in 2021, were not income when received.⁵ The court said its decision did not depend on Revenue Ruling 2023-14, but on the general tax law on income.⁵

UK. HMRC first asks whether staking is a trade, looking at things like how organised, risky and commercial it is.³ If it is not a trade, the sterling value of the tokens when you receive them is taxed as miscellaneous income, less any suitable expenses.³ If you keep the tokens, Capital Gains Tax may apply when you later dispose of them.³

GOV.UK says there is an allowance of up to £1,000 a year for trading and miscellaneous income, and crypto income counts towards it.⁷

Mining

Mining means using computers to verify additions to a blockchain, in return for new tokens.¹⁰ In the US, the fair market value of mined coins on the day you receive them counts in your income.⁸ In the UK, mining that is not a trade is taxed like staking: the sterling value when received is miscellaneous income.¹⁰

Airdrops and forks

A hard fork is a change to a blockchain's rules that splits it in two, which can create a new coin. An airdrop is when coins are sent to many addresses at once.²

US. In Revenue Ruling 2019-24, the IRS said a hard fork that gives you no new coins is not income.² But if new coins are airdropped to you after a hard fork, that is ordinary income, at their fair market value when you can control them.² In the ruling's example, 25 new coins worth $50 give $50 of income and a $50 basis.² If an exchange holds the coins and does not support the new coin, you do not yet have control.²

UK. HMRC treats the new tokens from a fork differently. It says their value comes from the tokens you already held. They go into their own pool, and the cost already in your pool is split between the old tokens and the new ones.¹¹ For other airdrops, HMRC says Income Tax will not always apply. It may not apply if you did nothing in return. It does apply if the airdrop was given in return for, or in expectation of, a service.⁴ Either way, Capital Gains Tax may apply when you later dispose of the tokens.^4,12