Crypto tax rates for 2026, explained

For 2026, long-term gains on digital assets held more than one year are taxed at 0%, 15%, or 20%, with the 0% rate covering taxable income up to $49,450 (single) or $98,900 (married filing jointly). Short-term gains are taxed as ordinary income at 10% to 37%, and the 3.8% net investment income tax can apply on top.

Every figure on this page comes from the IRS’s official inflation adjustments for 2026, Rev. Proc. 2025-32, announced by the IRS on October 9, 2025.

Start here: crypto is property

The IRS treats digital assets as property, not currency. Every sale, every crypto-to-crypto trade, and every purchase made with crypto is a disposition of property — a taxable event requiring you to calculate gain or loss against what you originally paid (your basis).

That has been the rule since Notice 2014-21, and the IRS’s digital assets page states it plainly: for U.S. tax purposes, digital assets are considered property, not currency. If that framework is new to you, our plain-language overview of how digital assets are taxed starts from the beginning.

Short-term vs. long-term

The single biggest driver of your rate is holding period. Assets held more than one year before disposition are long-term; assets held one year or less are short-term.

• Short-term gains are taxed as ordinary income — the same rates that apply to your wages.
• Long-term gains get the preferential capital gains rates: 0%, 15%, or 20%, depending on your income.

The line comes straight from section 1222 of the Internal Revenue Code: long-term means held for more than one year, short-term means one year or less. The IRS’s virtual currency FAQ adds the counting rule: your holding period begins the day after you acquire the asset. Buy on February 10, 2026, and February 11, 2027 is the first day a sale produces a long-term gain; sell on February 10, 2027 and you held exactly one year — still short-term. Each lot you acquire has its own clock.

Holding an asset one year and a day instead of eleven months can change the rate on your gain more than anything else you control.

The long-term rates for 2026: 0%, 15%, or 20% — plus the NIIT

Long-term capital gains are taxed at 0%, 15%, or 20% depending on your taxable income. On top of that, higher-income taxpayers may owe the 3.8% net investment income tax (NIIT) on investment gains, bringing the effective top rate on long-term gains to 23.8%.

Here are the 2026 breakpoints, by filing status:

2026 taxable-income breakpoints per Rev. Proc. 2025-32, §4.03. Each band runs from just above the lower figure through the higher figure — read “$49,450 to $545,500” as over $49,450 but not over $545,500.

Read the table carefully: these are taxable-income breakpoints, not gain-size limits. Long-term gains stack on top of your ordinary income, and the 0% rate applies only to the portion of the gain that fits under the breakpoint. A single filer with $45,000 of taxable wages does not get $49,450 of tax-free gain — only the first $4,450 of gain rides free, and the rest is taxed at 15%. The worked example below shows the mechanics.

The 3.8% net investment income tax

The NIIT is a separate 3.8% tax under section 1411. It applies to the lesser of your net investment income — which includes capital gains from investment crypto, short- and long-term alike — or the amount by which your modified adjusted gross income exceeds:

• $250,000 for married couples filing jointly and surviving spouses,
• $200,000 for single filers and heads of household, and
• $125,000 for married individuals filing separately.

Unlike the brackets above, these thresholds are fixed in the statute and are not indexed for inflation, so they reach more taxpayers each year. The IRS’s Topic 409, Capital gains and losses is the plain-English starting point for how the NIIT sits alongside the capital gains rates.

What is taxed as ordinary income

Not everything crypto-related is a capital gain. Some events are income when they happen, taxed at ordinary rates:

• Short-term gains on assets held one year or less.
• Getting paid in crypto for work, goods, or services.
• Mining rewards.
• Staking rewards.

Crypto received as income also gets a basis equal to the value you reported, and a later sale of those units is a separate capital gain or loss event.

Ordinary income means the regular brackets. For 2026, per Rev. Proc. 2025-32, §4.01:

2026 taxable-income brackets per Rev. Proc. 2025-32, §4.01. Bands run from just above the lower figure through the higher figure.

These are marginal rates. Crossing a threshold does not re-tax everything below it — only the dollars above the line pay the higher rate. A short-term gain that pushes you from the 12% bracket into the 22% bracket costs you 22% only on the portion that lands there.

Common events and how they are taxed

A worked example: the same gain, two rates

Take a single filer with $56,100 in wages in 2026. After the $16,100 standard deduction, that is $40,000 of taxable ordinary income. Now suppose a crypto sale produces a $20,000 gain, bringing taxable income to $60,000.

If the gain is long-term (held more than one year), it stacks on top of the $40,000 and is taxed at the capital gains rates:

• The first $9,450 of gain fills the space up to the $49,450 breakpoint — taxed at 0%.
• The remaining $10,550 is taxed at 15% — $1,582.50.
• Tax on the gain: $1,582.50, an effective rate of about 7.9%.

If the same gain is short-term (held one year or less), it is ordinary income taxed on top of the $40,000:

• $10,400 fills the rest of the 12% bracket (which ends at $50,400) — $1,248.
• $9,600 lands in the 22% bracket — $2,112.
• Tax on the gain: $3,360, an effective rate of 16.8%.

Identical gain, identical income — and a $1,777.50 difference, decided entirely by the calendar. No NIIT either way: this filer’s income is nowhere near the $200,000 threshold.

What not to do

• Don’t use these numbers for your 2025 return. The return filed in early 2026 covers 2025 income and uses 2025 figures. Match the year of the income to the year of the table.
• Don’t treat bracket lines as cliffs. Rates are marginal — a dollar over a threshold raises the rate on that dollar, not on everything beneath it.
• Don’t confuse the two tables. The capital gains breakpoints and the ordinary brackets are separate schedules with different thresholds. For a single filer, the 20% capital gains rate starts at $545,500 while the 37% ordinary rate starts at $640,600 — they do not line up.
• Don’t forget that swaps and purchases are dispositions. Trading one token for another, or buying a laptop with crypto, triggers gain or loss just like a sale for dollars.
• Don’t assume your broker’s form computes your gain. In the transition years, many forms show proceeds without basis. Our Form 1099-DA guide covers how to reconcile a form that overstates your gain.
• Don’t sell at eleven months without doing the date math. The day-after counting rule means “about a year” is not the same as “more than one year.”

Edge cases worth knowing

Crypto received as income restarts the clock. Staking rewards, mining income, and crypto wages come in as ordinary income at fair market value — and per the IRS’s virtual currency FAQ, that value becomes your basis and a new holding period begins. Selling those units quickly usually produces little additional gain; holding them starts a fresh one-year clock toward the long-term rates.

Losses have their own limits. Capital losses offset capital gains in full, but under section 1211 only $3,000 of net capital loss per year ($1,500 if married filing separately) can be deducted against ordinary income; the remainder carries forward to later years under section 1212. Losses from scams and theft follow a different — and after 2017, far harsher — set of rules; see our guide to what current law says about crypto scam losses.

The wash-sale rule, as written, covers securities. Section 1091 by its terms applies to sales of “stock or securities,” and the statutory text does not mention digital assets. Congress could change that at any time, so be cautious about building a loss-harvesting strategy around the gap.

Some NFTs may face a 28% rate. Under Notice 2023-27, the IRS intends to decide whether an NFT is a collectible by looking through to the asset it represents — and long-term gain on collectibles is taxed at a maximum 28% rate rather than the 0/15/20 schedule. The analysis is pending further guidance, so NFT sellers should not assume the standard rates apply.

Past years don’t disappear. The rates above only matter if the gains get reported. If you have prior-year transactions that never made it onto a return, our guide to options for unreported crypto walks through the paths back into compliance.

Why 2026 is different: basis reporting arrives

The rates above are not new. What changes in 2026 is what the IRS sees. Digital asset brokers began reporting gross proceeds on Form 1099-DA for transactions in 2025, and for transactions beginning in 2026 they also report cost basis. That makes your own basis records — and reconciling them against what your broker reports — matter more this year than ever. Our Form 1099-DA guide explains the transition and the records worth keeping.

Common questions

Last reviewed July 30, 2026 · Reviewed by Andrew Gordon, JD, CPA

This page is educational and does not constitute tax or legal advice for your specific situation. For questions about your own filings, consult a qualified tax professional.