Solana Staking Taxes (Beginner’s Guide)

What are the tax implications of Solana staking? 

Solana staking rewards are subject to ordinary income tax and capital gains tax. 

Ordinary income tax: You pay ordinary income tax based on the value of your staking rewards upon receipt (defined as when you have ‘dominion and control’ over your rewards. We’ll go more in depth about this concept later in the article.)

Capital gains tax: You pay capital gains tax when you eventually sell, trade, or spend your rewards. Your capital gain/loss is calculated based on how the price of your crypto has changed since you originally received it. 

To better understand how this works, let’s take a look at an example below.

It’s important to note that you are technically not taxed twice on the same profits. You are taxed once based on your income upon receipt. Then you are taxed when you dispose of your crypto, based on how its value changed since you originally received it. 

How much are Solana staking rewards taxed? 

Staking rewards are taxed as ordinary income at your marginal tax rate, which can range from 10% to 37% depending on your total income for the year (the same rate as your other income, including income from your job). 

When you dispose of your staking rewards, they are subject to capital gains tax. If you held your staking rewards for less than a year,  your profits are taxed at the same rate as income (10-37%). If you held rewards for more than a year, your profits are taxed at the lower long-term capital gains rate (0-20%). 

Is un-staking Solana a taxable event? 

There’s no tax for staking or un-staking Solana. You are taxed when your rewards are available to withdraw. 

The taxable event occurs when you receive staking rewards (in other words, when you’re able to freely withdraw and trade them) and when you dispose of them. 

What is dominion and control and how does it relate to staking rewards? 

You owe taxes on staking income when your rewards are made available to you. This is true even if you never withdraw them. 

The IRS uses a concept called "dominion and control" to determine when you’ve received your staking rewards. You have dominion and control as soon as you can freely trade and transfer your staking rewards. 

Solana allows users to withdraw their rewards as soon as they are received. As a result, it’s reasonable to assume that you have ‘dominion and control’ right away.

What if I only earned $20 from Solana staking? 

You're legally required to report all staking income regardless of the amount, even if it's just $20.

There's no minimum threshold for reporting crypto income to the IRS. Whether you earned $20 or $20,000 in staking rewards, you must include it on your tax return as ordinary income. 

Are liquid staking rewards taxed differently? 

Liquid staking tokens like mSOL or jitoSOL are also subject to income tax. 

Liquid staking has become increasingly popular in the Solana ecosystem because it lets you stake SOL while maintaining liquidity. 

When you stake through a platform like Marinade Finance, you receive mSOL tokens that represent your staked SOL plus accumulated rewards. Your mSOL represents the staked portion of your Solana. 

At this time, the IRS has not provided definitive guidance on how liquid staking is taxed. Different investors have different approaches to reporting depending on their risk profile. 

The conservative approach: You deposit 100 SOL and receive 100 mSOL. Later, that 100 mSOL can be redeemed for 105 SOL. That means you’ve effectively earned 5 SOL in staking rewards. Report this as income when it’s made available. 

The aggressive approach: Only report income when you redeem your liquid staking tokens back to regular SOL. Report capital gains based on how the value of your staking tokens has changed since you originally received them. 

Most tax professionals recommend the conservative approach. 

Will staking tax laws change in the future? 

As of today, Solana staking rewards are subject to income and capital gains tax. However, simplifying the tax code for staking has been discussed in Congress. 

In 2023, Congressman Mike Carey introduced the "Tax Treatment and Simplification for Mining and Staking Act," which would allow taxpayers to recognize staking rewards as income only when they're sold, not when they’re received. 

As of October 2025, no relevant bill related to simplifying staking taxes has passed Congress. This means until further notice staking rewards are ordinary income when you gain dominion and control over them.

Where do I report staking rewards on my tax return? 

Staking rewards are reported as "Other Income" on Schedule 1 of Form 1040. Capital gains for selling rewards should be reported on Schedule D. 

Step 1 - Reporting income from staking rewards: On Schedule 1 (Additional Income and Adjustments to Income), line 8z is designated for "Other Income." This is where you report the total fair market value of all staking rewards received during the tax year. 

Step 2 - Reporting capital gains when you sell: When you eventually sell, trade, or spend your staking rewards, you report the capital gain or loss on Form 8949 and Schedule D. You'll need to track:

• Date acquired (when you received the staking reward)
• Date sold
• Cost basis (the fair market value when you received it, which you already paid income tax on)
• Proceeds (the fair market value when you sold/disposed of it)
• Resulting gain or loss
• Any fees related to selling/disposing of your staking rewards

How crypto tax software can help 

Crypto tax software can automate the process of reporting your staking taxes. 

Calculating taxes on Solana staking rewards manually can be very difficult. Remember, each time you receive staking rewards, you’re required to do the following: 

1. Record the exact date and time you received your Solana 
2. Fair market value of your staking rewards at that moment 
3. Track the cost basis for future capital gains calculations

CoinLedger can make reporting your staking rewards and crypto taxes easy. The platform integrates with hundreds of blockchains and wallets. You can type in your Solana wallet address and the platform will automatically calculate your income, gains, and losses. 

CoinLedger serves over 700,000 investors worldwide. 

Get started with a free account today.