How Is Tron Staking Taxed? (IRS Rules 2025)

How are Tron staking rewards taxed? 

When you stake your Tron (TRX) tokens and earn rewards, the IRS treats those rewards as ordinary income. This means you owe income tax based on the fair market value of your TRX rewards on the day you receive them.

Here's an example: Let's say you stake 10,000 TRX tokens and earn 50 TRX as a reward. If TRX is worth $0.20 on that day, you've earned $10 in income (50 TRX × $0.20 = $10). This $10 is considered ordinary income subject to income tax. 

Am I taxed again when I sell my staking rewards? 

When you eventually sell, trade, or spend your TRX rewards, you'll pay capital gains tax. 

Here’s an example of how it works.

How much are capital gains taxed? 

Capital gains tax rates depend on how long you held the crypto:

• Short-term capital gains: Taxed at ordinary income rates (10-37% depending on your total income for the year).
• Long-term capital gains: When you hold for longer than 12 months, your capital gains from disposals are taxed at a lower rate (0%, 15%, or 20%, depending on your total income for the year).

When are Tron staking rewards taxable? 

The IRS uses a concept called ‘dominion and control’ to determine when your staking rewards are considered ‘received’ for tax purposes. 

You have ‘dominion and control’ over your staking rewards whenever you are able to freely withdraw and trade them. This is true even if you never withdraw your staking rewards to an external wallet. 

Do I have to report Tron staking rewards to the IRS? 

You must report all Tron staking rewards to the IRS, regardless of the amount. There's no minimum threshold for reporting your cryptocurrency on your taxes. 

Even if you only earned $5 in TRX staking rewards for the entire year, you're legally required to report it on your tax return.

Do I have to answer ‘Yes’ to the crypto question on Form 1040 if I earned TRX staking rewards? 

Form 1040 directly asks investors: "At any time during 2024, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, gift, or otherwise dispose of a digital asset?"

If you earned staking rewards, you must answer "Yes" to this question. Answering falsely could be considered tax fraud. 

Do staking rewards get reported on Form 1099? 

If you earned $600 or more of staking rewards and other income on a centralized exchange, it will be reported to the IRS on Form 1099-MISC.

Even if you do not receive this form, you are required to report your taxable income from staking and other sources. 

What happens if I don’t report my Tron staking rewards? 

Failing to report crypto income can result in serious consequences including penalties, fines, and even an audit. 

Remember, the IRS has stepped up crypto tax enforcement in recent years, and has worked with blockchain analysis firms like Chainalysis to identify ‘anonymous’ wallets. 

How do I report Tron staking rewards? 

Your staking income should be reported on Schedule 1, Line 8z (Other Income). 

When you sell, trade, or spend your TRX staking rewards, you should report your capital gains and losses on Form 8949.

Get started with CoinLedger today 

Manually reporting staking rewards on your taxes can be difficult. CoinLedger can help. 

CoinLedger automatically imports your Tron staking transactions from more than 800 major exchanges and wallets. The software tracks all of your staking income, calculates the fair market value at the time you received it, and generates your necessary tax forms in minutes. 

Get started with a free account today.