Crypto Tax Rates 2026: Breakdown by Income Level

Wondering how much you’ll need to pay in cryptocurrency taxes? Let’s break down how much money you’ll owe to the IRS in different scenarios. 

What is the cryptocurrency tax rate? 

In the US, crypto is taxed at 0% to 37% at the federal level. Long-term capital gains on crypto held more than a year are taxed at 0%, 15% or 20%, while short-term gains and crypto income are taxed at ordinary income rates of 10% to 37%.

The IRS treats cryptocurrency as property (IRS Notice 2014-21), so crypto gains and losses are generally taxed under the same capital gains rates and holding-period rules as stocks.

Ordinary income tax: If you earn cryptocurrency, whether through your job, mining, staking, or airdrops, you’ll recognize ordinary income subject to income tax. This can range from 10-37% depending on your income level. 

2026 income tax brackets (taxes filed in 2027):

How much are capital gains taxed? 

Cryptocurrency disposals are subject to capital gains tax. Examples of disposals include selling crypto, trading your crypto for other cryptocurrencies, or making a purchase with crypto. 

Short-term capital gains tax: If you’ve held your cryptocurrency for one year or less, your disposals will be subject to short-term capital gains tax. For tax purposes, this is treated the same as ordinary income and can range from 10%-37% depending on your income level (see above chart). 

Long-term capital gains tax: If you’ve held cryptocurrency for more than a year, your disposals will be subject to long-term capital gains tax. This ranges from 0-20% depending on your income level. 

2026 long-term capital gains tax rates (taxes filed in 2027):

Same trade, same profit. Holding for more than a year saves Sarah more than $1,100!

How much tax will I pay on crypto gains?

Here’s roughly how much federal tax a single filer would owe in 2026 if crypto gains were their only income. These estimates include the $16,100 standard deduction and the 3.8% net investment income tax where it applies.

Your actual tax bill will depend on your other income, filing status, deductions, and state taxes.

Not sure how much you’ll be paying in crypto taxes? Check out our free crypto tax calculator.  

2025 crypto tax rates (returns filed in 2026)

Still filing your 2025 return? If you requested an extension, your deadline is October 15, 2026. Here are the 2025 rates that apply.

2025 income tax brackets:

2025 long-term capital gains tax rates:

How do crypto tax brackets work? 

It’s important to remember that most taxpayers don’t pay a single flat tax rate on their entire income. Instead, they pay progressively higher tax rates on different portions of income. 

For example, a taxpayer with $25,000 of taxable income won’t pay a flat 12% tax. Instead, they’ll pay 10% on the first $12,400 and 12% on the next $12,600 (using 2026 brackets). 

What crypto transactions are taxable?

Not sure whether your crypto transactions count as a capital gain or income tax event? Here’s a breakdown of common taxable transactions and how they’re taxed. 

Generally, you pay capital gains tax when you dispose of cryptocurrency (when ownership of your crypto changes). You pay income tax when you earn cryptocurrency.

Not taxable:

• Buying crypto with cash
• Holding crypto
• Moving crypto between wallets you own

You only owe tax when you dispose of your crypto or earn it as income.

Will President Trump make taxes on crypto 0? 

Despite talk of a 0% tax rate on US-based cryptocurrencies, no law has changed how crypto is taxed.

The One Big Beautiful Bill, signed in July 2025, didn’t include any crypto tax changes. Lawmakers have also introduced separate crypto tax bills. These include Senator Cynthia Lummis’s proposal to exempt gains on purchases of $300 or less made with crypto, as well as the House’s PARITY Act. As of September 2026, neither bill has passed.

Until new legislation passes, cryptocurrencies are still subject to the same tax rates as stocks and other property.

What tax rates do I pay on NFTs? 

NFTs are taxed similarly to other crypto-assets. When you dispose of an NFT, you’ll incur a capital gain or a loss based on how the price of your NFT changed since you originally received it. 

If your NFT is considered a collectible, long-term gains are taxed at your ordinary income tax rate, up to a maximum of 28%. Under IRS Notice 2023-27, the IRS generally looks at the asset an NFT represents to decide whether it counts as a collectible. 

Do I pay state taxes on crypto?

In most states, yes. On top of federal taxes, most states tax crypto gains and crypto income the same way they tax your other income.

Nine states don’t have a broad income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, Washington does tax large long-term capital gains.

For more information, check out our guide to crypto tax-friendly states.

Can I reduce my income and get to a lower tax bracket? 

Itemized deductions can reduce your tax bill for the year. 

In some cases, deductions can reduce your taxable income to the point where you may fall into a lower tax bracket. For example, if you have $40,000 of income for the year and claim $20,000 worth of itemized deductions, your taxable income will fall to $20,000.

Eligible itemized deductions include cryptocurrency donations, mortgage interest, and state/local tax paid. 

Remember, itemized deductions will only reduce your tax bill if their sum is greater than the standard deduction available to you ($16,100 for single taxpayers in 2026). 

Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 ($2,000 for married couples filing jointly) in cash donations to charity. However, this deduction only covers cash, so you’ll still need to itemize to deduct a crypto donation.

Are there other ways I can reduce my cryptocurrency taxes? 

Here are a few strategies that can help you save money on your crypto tax bill. 

Realize profits in low-income years 

The higher your taxable income, the more taxes you’ll pay on capital gains. As a result, many investors choose to realize profits in years when their income is low (for example, when they are in between jobs or in school full-time). 

Take advantage of long-term capital gains

Remember, the tax rate for long-term capital gains is significantly lower than the tax rate for short-term capital gains. As a result, simply holding your assets for longer than 12 months can significantly reduce your tax bill. 

Harvest your capital losses 

Selling your cryptocurrency at a loss comes with tax benefits. 

Capital losses can offset capital gains and up to $3,000 of ordinary income ($1,500 if married filing separately). Net losses above the annual limit can be rolled forward into future years. 

It’s important to note that cryptocurrency has a unique advantage when it comes to tax loss harvesting. 

In the United States, stocks are subject to a wash sale rule which states that investors cannot claim losses if they buy substantially identical shares within 30 days before or after the sale. However, this rule currently does not apply to cryptocurrency.

It’s important to note that this could change. The Lummis bill and the PARITY Act would both extend the wash sale rule to cryptocurrency.

For more tips, check out our complete guide on reducing your crypto taxes.

How does the IRS track crypto? 

Despite the fact that cryptocurrency is ‘pseudo-anonymous’, the IRS can track your cryptocurrency transactions. 

Remember, all transactions on blockchains like Bitcoin and Ethereum are publicly visible. That means blockchain analytics tools can help link ‘anonymous’ wallet activity to known investors. In the past, the IRS has worked with contractors like Chainalysis for this exact purpose. 

The IRS now has even more information at its disposal to track cryptocurrency transactions. Starting with 2025 transactions, US crypto brokers, including centralized cryptocurrency exchanges, report your gross proceeds to the IRS on Form 1099-DA.

For crypto you buy in 2026 or later and sell on the same exchange, the form also reports your cost basis. That means the IRS will be able to see your gains and losses on those trades.

The IRS has also sent warning letters (Letters 6173, 6174 and 6174-A) to taxpayers who may not have reported their cryptocurrency activity. Now that brokers issue Form 1099-DA, the IRS can more easily match reported sales to tax returns.

Do I have to pay net investment income tax (NIIT)? 

Did you make a major profit on cryptocurrency this year? You may be required to pay an additional 3.8% tax on your net investment income. 

Net investment income includes capital gains (including gains on crypto), interest, dividends, rental and royalty income, and passive business income, minus related expenses. The tax is 3.8% of your net investment income or of the amount your income exceeds the thresholds below, whichever is smaller.

It’s important to note that NIIT only applies if your modified adjusted gross income (MAGI) is above the following thresholds.

For high earners, that means the top federal tax rate on most long-term crypto gains is effectively 23.8%: the 20% top rate plus the 3.8% NIIT. Collectible NFTs can face up to 31.8%.

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