The U.S. House Ways and Means Committee advanced the Digital Asset Tax Certainty Act in a 38-5 vote on Sept. 16, moving a broad crypto tax proposal forward less than a day after the Senate failed to advance the CLARITY Act.
The House measure would establish federal tax rules for digital assets, including provisions covering small transactions, mining, staking, wash sales, broker reporting and voluntary tax disclosures.
KEY TAKEAWAYS
- The Digital Asset Tax Certainty Act passed the House Ways and Means Committee 38-5.
- Qualifying digital asset networks and transaction fees of $10 or less would receive de minimis tax treatment under the proposal.
- The bill would clarify ordinary-income treatment for mining and staking rewards, but questions remain over when those rewards become taxable.
- The Treasury would be directed to create a voluntary disclosure program for taxpayers with past digital asset reporting issues.
- The committee action came less than 24 hours after the Senate’s CLARITY Act failed to secure the 60 votes required to advance.
HOUSE MOVES ON TAXES AS SENATE MARKET STRUCTURE STALLS
The Ways and Means Committee’s vote advances H.R. 10357 to the full House. The legislation combines several digital asset tax proposals developed during committee work earlier this year and seeks to bring crypto transactions closer to the tax treatment applied to comparable traditional financial assets.
Committee Chairman Jason Smith described the legislation as the product of more than a year of bipartisan discussions.
“The Digital Asset Tax Certainty Act is the product of bipartisan discussions and collaboration.”
The proposal would also extend existing anti-abuse rules, including wash sale and constructive sale provisions, to digital assets. Digital asset dealers and traders could gain access to mark-to-market accounting, while certain charitable donations of digital assets would receive treatment similar to publicly traded securities.
$10 THRESHOLD TARGETS EVERYDAY CRYPTO PAYMENTS
One of the bill’s most practical provisions concerns small crypto transactions. The legislation would remove gain or loss recognition for qualifying digital assets used to pay network or transaction fees when the fee does not exceed $10. The provision is designed to reduce the tax reporting burden associated with routine blockchain transactions.
The broader bill also seeks to simplify compliance by directing the Treasury Department to establish a digital asset voluntary disclosure program. Eligible taxpayers could use the program to correct previous returns and settle outstanding tax, interest and applicable penalties under the program’s terms.
MINING AND STAKING TAX TREATMENT REMAINS UNRESOLVED
The proposal classifies income from mining and staking as ordinary income, providing a clearer tax category for rewards received through those activities. However, lawmakers did not fully settle the separate question of when those rewards should be recognized as taxable income. That distinction matters because crypto users can receive newly created tokens without necessarily selling them for dollars. Rep. Steven Horsford, one of the Democrats involved in the committee’s work, said the legislation improves the treatment of mining and staking but leaves the timing issue unresolved.
The earlier legislation considered by the committee had included an option that could defer recognition of certain rewards, but that provision was not part of the final package advanced on Sept. 16.
CLARITY ACT SETBACK ADDS URGENCY TO TAX EFFORT
The Ways and Means vote came shortly after the Senate rejected a procedural motion to advance the CLARITY Act. The market structure legislation received 49 votes in favor and 50 against, falling short of the 60 votes required. The Senate bill sought to establish a statutory framework dividing regulatory responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its failure leaves that broader market structure debate unresolved, although both agencies continue working within their existing authorities.
The timing of the House tax vote therefore highlights two separate tracks for U.S. crypto legislation. Tax rules have now advanced through a House committee, while the larger question of market structure remains stalled in the Senate.
WHAT HAPPENS NEXT
Committee approval does not make the tax framework law. The measure must still advance through the House and Senate and ultimately receive presidential approval before its provisions take effect. The House’s legislative calendar is also a constraint. With lawmakers preparing to leave Washington ahead of the November elections, further action could move into the post-election session.
The Senate Finance Committee is expected to be an important venue for the next stage of the tax debate, particularly if senators develop or advance their own digital asset tax legislation.
CONCLUSION
The House committee vote gives U.S. crypto taxation a concrete legislative path at a time when broader market-structure legislation has hit a setback in the Senate. The Digital Asset Tax Certainty Act would address several long-standing compliance issues, from small transaction fees to wash sales and mining and staking income. But the unresolved timing of reward taxation shows that significant technical questions remain.
For the crypto industry, the immediate distinction is clear: tax legislation has moved forward in Congress, while comprehensive market-structure reform still requires a new bipartisan agreement in the Senate.
