US Crypto Tax Rates 2026: What You Need to Know!

How much tax do you actually owe on your crypto in 2026? The crypto tax rates in the USA depend on what you did with it, how long you held it, and where you live. 

This guide breaks down every rate for crypto tax by state, from federal income tax brackets to state-specific rules, so you know exactly what to expect before you file in 2026.

Key takeaways

• The IRS taxes crypto as property, not currency.

• Short-term gains (held under 1 year) are taxed as ordinary income: 10% to 37%.

• Long-term gains (held over 1 year) are taxed at 0%, 15%, or 20%, depending on your income.

• Income from mining, staking, and airdrops is taxed as ordinary income.

• Nine US states have no state income tax at all. Missouri eliminated the capital gains tax on crypto starting in 2025.

• As of 2026, crypto exchanges must report your gains to the IRS via Form 1099-DA.

What is the cryptocurrency tax rate?

There is no single crypto tax rate. What you pay depends on two things: the type of crypto activity and how long you held the asset.

The IRS treats crypto as property. That means every time you sell, trade, or spend it, you trigger a taxable event. Your gains are then taxed either as ordinary income or as capital gains, depending on your holding period.

• Ordinary income from crypto: Mining rewards, staking, airdrops, hard forks, and crypto received as payment. Taxed at your regular income tax rate.

• Short-term capital gains: Crypto held for less than 12 months. Taxed at your ordinary income rate, which ranges from 10% to 37%.

• Long-term capital gains: Crypto held for more than 12 months. Taxed at 0%, 15%, or 20%, depending on your total income.

How does crypto tax work in the US?

The US uses a progressive tax system. You do not pay one flat rate on everything you earn. Instead, different portions of your income are taxed at different rates.

For example, if you earned $50,000 in total income for 2025, you would not pay 22% across the board. You would pay 10% on the first $11,925, 12% on the next portion, and 22% only on the amount above $48,475.

On top of federal tax, most states charge their own income tax. A handful have no income tax at all, while others use flat rates or tiered brackets. We cover all of this in the state sections below.

How much tax do you pay on crypto?

The exact amount depends on your income level, filing status, and whether your gains are short-term or long-term.

A crypto investor earning $60,000 in total income (including $10,000 in crypto gains held for less than a year) would pay short-term capital gains tax at their marginal rate. 

In this case, the $10,000 gain falls into the 22% federal bracket.

That same investor, if they had held the crypto for over 12 months. He/she would instead pay 15% long-term capital gains tax on that $10,000, saving a meaningful amount at filing time.

Which cryptocurrency transactions are taxable in 2026?

Not every crypto activity creates a tax bill. The IRS draws a clear line between taxable events and tax-free ones.

Which crypto transactions are taxed and which ones are not?

Want to know more about how specific activities are taxed? 

Read next: How are crypto airdrops taxed in the USA?

Federal income tax rates 2025 on short-term capital gains (for taxes due in 2026)

Short-term gains and crypto income are taxed at the same federal income tax rates. Here are the 2025 brackets:

Source: IRS Revenue Procedure 2024-40

Federal long-term capital gains tax rate 2025 (for taxes due in 2026)

If you held your crypto for more than a year before selling, you qualify for long-term capital gains rates, which are significantly lower than regular income tax rates.

Source: IRS Revenue Procedure 2024-40

Note: If your total income for 2025 is below $48,350 as a single filer, you owe zero federal capital gains tax on long-term crypto gains.

State tax rates on crypto

Federal tax is only part of what you owe. Most states add their own layer of income tax on top, and each state handles crypto differently.

Some states use progressive brackets (like the federal system), others use a flat rate, and a small number have no income tax at all. A few states have also introduced specific rules around capital gains from crypto.

The amount you owe at the state level depends entirely on where you live.

Which US states have provided guidance on crypto taxes?

Most states still follow federal rules for taxing crypto as property. However, a few have issued formal guidance, mostly on sales tax:

• California: Treats crypto as a cash equivalent. Crypto purchases are taxed the same way as those made with fiat.

• Kansas: Sellers accepting crypto must convert to USD and charge state sales and use tax.

• Kentucky: Same approach as Kansas. Crypto is treated as a cash equivalent for sales tax purposes.

• Michigan: Does not view crypto as tangible personal property, so no sales or use tax applies to crypto purchases.

• Missouri: Approved a bill that eliminates capital gains tax on crypto and stocks for individuals, effective from 2025.

• New Jersey: Treats crypto as cash for sales tax purposes.

• New York: Same as New Jersey. Crypto purchases are taxed like fiat purchases.

• Pennsylvania: Limited guidance, but NFTs may be subject to sales tax unless an exemption applies.

• Washington: Does not tax crypto purchases, but purchases made with crypto are taxed. Also has detailed NFT guidance, with state sales tax applying in many cases.

• Wisconsin: Crypto is treated as an intangible right rather than personal property, so the sale of crypto itself is not subject to sales tax.

Crypto taxes in Texas

Texas has no state income tax, which makes it one of the most favorable states for crypto investors in the US.

There is also a bill before the Texas legislature that would make purchases of goods and services with Bitcoin tax-free in the state. While not yet law, it signals a clearly crypto-friendly direction.

On the federal side, you still owe capital gains tax or income tax on your crypto activity, regardless of which state you live in.

Which are the US states with no income tax?

Nine states currently have no state income tax:

• Alaska

• Florida

• Nevada

• New Hampshire

• South Dakota

• Tennessee

• Texas

• Washington

• Wyoming

One important note: no income tax does not always mean no tax on crypto. Washington, for example, has no income tax but does apply a capital gains tax. The first $1 million in capital gains is taxed at 7%, and anything above that is taxed at an effective rate of 9.9%. There is a $278,000 annual exemption.

Flat state income tax rates on crypto

These 14 states apply a single flat income tax rate, regardless of how much you earn:

In New Hampshire, only dividend and interest income is taxed at the state level. Regular income, including most crypto gains, is not subject to state income tax.

State capital gains tax rates and exemptions

Some states have introduced specific rules that can reduce what you owe on capital gains:

• Arkansas: 50% deduction on long-term capital gains for most taxpayers.

• Massachusetts: Short-term capital gains are taxed at a higher rate of 8.5%.

• Missouri: Capital gains are fully exempt from state income tax from 2025 onward.

• Maryland: An additional 2% surtax applies to capital gains for those earning more than $350,000.

• Montana: Long-term capital gains are taxed at either 3% or 4.1%, depending on total income.

• New Mexico: 40% deduction on net capital gains.

• North Dakota: 40% deduction on long-term capital gains.

• South Carolina: 44% deduction on long-term capital gains.

• Vermont: $5,000 deduction on capital gains.

• Wisconsin: 30% deduction on long-term capital gains.

These deductions can make a meaningful difference to your overall tax bill, especially for investors with large long-term positions.

California state income tax rates

California taxes crypto as ordinary income at the state level, with no special long-term capital gains rate. Here are the 2025 rates for single filers:

California has one of the highest top marginal income tax rates in the country. There is no lower rate for long-term gains at the state level, which makes the state particularly expensive for crypto investors.

Connecticut state income tax rates

Connecticut uses a tiered tax rate system. For single filers in 2025:

New York state income tax rates

New York taxes crypto gains as regular income at the state level. There is no separate long-term capital gains rate. Here are the 2025 rates for single filers:

Important: New York City and Yonkers residents pay additional local income taxes on top of the state rate.

When to file taxes for crypto in the USA

For most US taxpayers, the annual tax filing deadline is April 15th. If that date falls on a weekend or public holiday, the deadline shifts to the next business day.

If you need more time, you can request an automatic six-month extension, moving your deadline to October 15th. Keep in mind that this extends the time to file, not the time to pay. Any tax owed is still due by April 15th to avoid penalties and interest.

For the 2025 tax year, your return is due by April 15, 2026.

Also worth noting: as of 2026, all centralized US crypto exchanges are required to report your capital gains and losses to the IRS using Form 1099-DA. This means the IRS will have more visibility into your crypto activity than ever before.

Read next: IRS crypto tax forms explained

What tax rates do I pay on NFTs?

NFTs are taxed similarly to other crypto assets. When you sell or trade an NFT, you owe capital gains tax based on the difference between what you paid and what you received.

However, if the IRS classifies your NFT as a collectible, a higher long-term capital gains rate of 28% applies instead of the standard 0%, 15%, or 20% rates. This is particularly relevant for art, sports collectibles, and similar digital assets.

Short-term NFT gains are always taxed at ordinary income rates, regardless of the type.

Are there other ways I can reduce my cryptocurrency taxes?

Yes. A few strategies can meaningfully reduce your crypto tax bill:

Hold for longer than 12 months. Moving from short-term to long-term capital gains rates can cut your tax rate significantly. A single filer at the 22% income bracket pays just 15% on long-term gains instead.

Harvest your losses. Selling crypto at a loss lets you offset capital gains dollar for dollar. You can also use up to $3,000 in net losses to offset ordinary income each year. Any remaining losses carry forward to future years. Unlike stocks, crypto is currently not subject to the wash sale rule in the US, which means you can sell at a loss and buy back immediately. You can read more on our article crypto tax loss harvesting in the USA article.

Time your gains in low-income years. If you are between jobs, in school, or have a lower income in a given year, realizing gains then can push you into a lower bracket or even the 0% long-term capital gains tier.

Use itemized deductions. Deductions for mortgage interest, state and local taxes, and charitable crypto donations can reduce your taxable income. Donating appreciated crypto directly to a registered charity lets you avoid capital gains tax entirely on that amount. gifting crypto in the USA let you reduce you taxes.

Choose the right cost basis method. Using HIFO (highest in, first out) means you sell your most expensive lots first, which can reduce your taxable gains.

Read next: How FIFO and LIFO affect your crypto tax liability

How to do crypto taxes with Blockstats tax software

Calculating crypto taxes manually across multiple exchanges, wallets, and DeFi protocols is error-prone and time-consuming. Blockstats automates the whole process.

Connect your wallets and exchanges to Blockstats. It supports 500+ platforms, including Coinbase, Binance US, Kraken, Gemini, and MetaMask. Blockstats then pulls in your full transaction history, calculates your gains, losses, and income using real-time cost basis data, and generates the tax forms you need to file, including IRS Form 8949 and Schedule D.

The platform also flags tax-saving opportunities like loss harvesting, so you are not leaving money on the table.

Calculate your crypto taxes with Blockstats

Frequently asked questions

Do I have to pay tax on cryptocurrency?

Yes. The IRS treats crypto as property. Selling, trading, or spending it triggers capital gains tax. Earning it through mining, staking, or airdrops triggers income tax. Simply buying and holding crypto is not taxable.

What's the Bitcoin tax rate?

Bitcoin is taxed the same as any other cryptocurrency. Short-term gains are taxed at 10% to 37%, depending on your income. Long-term gains are taxed at 0%, 15%, or 20%.

How much tax on Bitcoin profits?

For long-term Bitcoin gains, you will pay 0% to 20%, depending on your total income. For short-term gains, you will pay 10% to 37%. The exact amount depends on your filing status and income bracket.

Will President Trump make taxes on crypto 0?

President Trump proposed making taxes on US-based cryptocurrencies 0%, but no legislation has been passed. Crypto is still taxed at the same rates as other property until Congress acts.

Do you pay state tax on crypto?

It depends on where you live. Most states tax crypto gains as income. Nine states have no income tax. A few, like Missouri, have eliminated capital gains tax on crypto entirely.

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

Yes. Itemized deductions, including charitable crypto donations and mortgage interest, can reduce your taxable income. If deductions bring your income below a bracket threshold, you pay the lower rate on that portion.