Home StatisticsUS Crypto Mining Tax Statistics for 2026

US Crypto Mining Tax Statistics for 2026

Name: US Crypto Mining Tax Statistics for 2026
Creator: KoinX
Published: 2026-04-22T05:59:17.216Z

Researched By: Avinash D.

Reviewed By: Ankush Kumar

Published: 22 Apr 2026

Last Updated: 22 Apr 2026

Cryptocurrency mining sits at the most scrutinized intersection of digital assets and U.S. tax law in 2026. The IRS has classified mining income as ordinary taxable income since Notice 2014-21, and that foundational guidance now operates alongside a dramatically expanded enforcement infrastructure: mandatory Form 1099-DA broker reporting in effect for 2025 transactions, a growing IRS Criminal Investigation cybercrime unit, and blockchain analytics tools that make on-chain income increasingly visible to regulators. At the same time, the energy cost structure of proof-of-work mining has become a material factor in both the economic viability of operations and the scale of deductible expenses available to business-classified miners.

At KoinX, we work closely with miners and tax professionals navigating these intersecting obligations, and the data compiled here reflects why understanding the tax treatment of mining income, the deductibility of electricity and equipment costs, and the compliance expectations the IRS has established is now a foundational requirement for anyone operating in this space.

This article presents statistics drawn exclusively from primary sources: IRS official guidance documents, IRS Criminal Investigation annual reports, the U.S. Energy Information Administration, the White House Office of Science and Technology Policy, IRS Statistics of Income working papers, SEC-filed 10-K annual reports from publicly traded mining companies, IRS Publications, Congressional Research Service analyses, and U.S. government fiscal data. Every statistic is cited inline with a direct URL to the originating document.

Scope and Methodology

All statistics in this article were drawn from primary sources that produced the underlying data themselves. Government agencies (IRS, EIA, OSTP, GAO), legislative bodies and their analytical offices (CRS), and publicly traded corporations filing required disclosures with the SEC (10-K annual reports) constitute the full universe of accepted sources. No media summaries, aggregator blogs, or secondary publications were used as sources. Where a statistic appeared initially in a secondary context, it was traced back to its primary document and only cited if a direct URL to that document could be verified.

Recency was enforced by limiting data to figures published or covering periods within the last two years (2024 and 2025), with the original study or fiscal year retained in every bullet. Geographic scope is U.S.-specific throughout, consistent with the article’s focus on IRS tax treatment, U.S. energy costs, and U.S. company disclosures.

Statistical integrity was maintained by enforcing one data point per bullet, one source per bullet, and no synthesis or inference across sources. URLs point to the specific IRS notice, publication, 10-K filing, EIA analysis, or government report page containing the underlying statistic, not to homepages or category pages.

Key limitations: The IRS does not publish a standalone line item for mining-specific tax revenue, and published aggregate energy consumption figures for crypto mining carry significant uncertainty ranges that are acknowledged by the sources. These limitations are identified in the relevant sections below.

US Crypto Mining Tax: The Numbers That Define 2026

Crypto mining income is classified as ordinary income under IRS Notice 2014-21, taxable at the fair market value of the mined cryptocurrency in U.S. dollars at the time of receipt, based on IRS guidance published in 2014 and reaffirmed in subsequent FAQs.
If a taxpayer’s mining of virtual currency constitutes a trade or business and is not undertaken as an employee, the net earnings from mining activities are self-employment income subject to self-employment tax, based on Question 9 of IRS Notice 2014-21 published by the Internal Revenue Service.
U.S. cryptocurrency mining operations consumed between 0.6% and 2.3% of total national electricity demand, based on estimates reported in a 2024 analysis published by the U.S. Energy Information Administration.
The White House Office of Science and Technology Policy estimated in 2022 that U.S. crypto-asset operations at that time accounted for approximately 0.9% to 1.7% of total U.S. electricity usage, a range comparable to all home computers or all residential lighting in the United States, based on the 2022 OSTP report on climate and energy implications of crypto-assets.
Only approximately 6.5% of all U.S. taxpayers reported cryptocurrency transactions to the IRS despite surveys estimating that between 12% and 21% of U.S. adults have owned cryptocurrency, based on a 2025 IRS Statistics of Income working paper using U.S. administrative tax data.
The Section 179 maximum expense deduction for qualifying business equipment placed in service in tax years beginning in 2025 is $2,500,000, with a phase-out threshold beginning at $4,000,000 in total qualifying property purchases, based on IRS Publication 946 published by the Internal Revenue Service.
Riot Platforms reported a cost of power for self-mining operations of $149.0 million in fiscal year 2024, up from $89.1 million in 2023, based on the 2024 Form 10-K annual report filed with the Securities and Exchange Commission.
MARA Holdings reported total revenues of $656.4 million for fiscal year 2024, a 69% increase from 2023, driven primarily by a higher average price of bitcoin mined, based on the 2024 Form 10-K annual report filed with the Securities and Exchange Commission.
The Tax Cuts and Jobs Act of 2017 introduced IRC Section 67(g), which suspended all miscellaneous itemized deductions, including hobby expense deductions, for tax years beginning after December 31, 2017 and before January 1, 2026, based on IRS guidance on TCJA changes for individuals published by the Internal Revenue Service.
The EIA forecasts that U.S. electricity demand will grow by 2.4% in 2025 and 2.6% in 2026, led by growth in the West South Central region as electricity demand from data centers and cryptocurrency mining facilities increases, based on the November 2025 Short-Term Energy Outlook press release published by the U.S. Energy Information Administration.

Mining Income Tax Classification and Reporting Requirements

The IRS requires that a taxpayer who mines virtual currency as a trade or business must include the fair market value of the mined cryptocurrency in gross income at the time of receipt, based on IRS Notice 2014-21 published by the Internal Revenue Service.
Business miners report mining income on Schedule C (Form 1040), Profit or Loss from Business, while hobby miners report mining income as other income on Schedule 1 of Form 1040, based on IRS FAQs on virtual currency transactions published by the Internal Revenue Service.
Mining income is taxed as ordinary income at federal rates ranging from 10% to 37% depending on total taxable income and filing status, based on IRS guidance on digital asset tax treatment published by the Internal Revenue Service.
When mined cryptocurrency is later sold, exchanged, or otherwise disposed of, a second taxable event occurs and any gain or loss is treated as capital gain or capital loss, with the original fair market value at receipt serving as the cost basis, based on IRS Notice 2014-21 published by the Internal Revenue Service.
The digital asset question on Form 1040, which all taxpayers must answer, was expanded to additional business forms including Forms 1041, 1065, 1120, and 1120-S beginning with tax year 2023, requiring disclosure by estates, trusts, partnerships, corporations, and S corporations, based on a 2024 IRS fact sheet published by the Internal Revenue Service.
Business mining activities that generate net earnings of $400 or more in a tax year trigger a self-employment tax obligation covering both the employee and employer portions of Social Security and Medicare contributions, based on IRS Notice 2014-21 and IRS Publication 334 cited therein.
The IRS uses blockchain analytics tools and conducts enforcement through its Criminal Investigation division, which initiated 111 new cybercrime investigations in Fiscal Year 2024 with defendants receiving average prison sentences of more than 5 years, based on the 2024 IRS Criminal Investigation Annual Report.
IRS-CI identified $10.59 billion in financial crimes in Fiscal Year 2025, a 15.7% increase from FY 2024, including $4.5 billion attributable specifically to tax fraud, marking a 111.8% year-over-year increase in tax fraud identified, based on the 2025 IRS Criminal Investigation Annual Report published by the Internal Revenue Service.

US Crypto Mining Energy Consumption and Electricity Costs

The U.S. Energy Information Administration received emergency clearance from the Office of Management and Budget on January 26, 2024 to begin collecting monthly data on electricity consumption from identified cryptocurrency mining companies operating in the United States, based on a 2024 EIA press release.
The Cambridge Bitcoin Electricity Consumption Index estimated global electricity usage associated with Bitcoin mining at a point estimate of 120 terawatt-hours in 2023, with a range of 67 to 240 terawatt-hours, based on figures reported in a 2024 EIA analysis.
The CBECI estimated Bitcoin mining power demand at the end of January 2024 at 19.0 gigawatts, with lower and upper bounds of 9.1 gigawatts and 44.0 gigawatts respectively, translating to total annual electricity demand of 80 to 390 terawatt-hours, based on a 2024 analysis published by the U.S. Energy Information Administration.
The White House OSTP estimated in a 2022 report that U.S. crypto-asset operations generated carbon dioxide emissions of approximately 25 to 50 million metric tons per year, based on the 2022 OSTP report on climate and energy implications of crypto-assets.
The OSTP 2022 report found that between January 2020 and January 2022, the United States’ share of global Bitcoin mining rose from 4.5% to 37.8%, based on the 2022 White House Office of Science and Technology Policy report.
The U.S. EIA reported that electricity demand from customers identified by ERCOT as large flexible load, which includes data centers and cryptocurrency mining operations, was expected to total 54 billion kilowatt-hours in 2025, up almost 60% from expected demand in 2024, based on the September 2024 Short-Term Energy Outlook published by the U.S. Energy Information Administration.
North Dakota experienced the fastest relative growth in commercial electricity demand in the United States at 37% (up 2.6 billion kilowatt-hours) between 2019 and 2023, attributed to the establishment of large computing facilities including cryptocurrency mining operations, based on a 2024 analysis published by the U.S. Energy Information Administration.
The EIA’s November 2025 Short-Term Energy Outlook projected that electricity demand growth in 2026 would be led by the West South Central region, particularly Texas, due to expansion of data centers and cryptocurrency mining facilities, based on the November 2025 press release by the U.S. Energy Information Administration.
Global crypto-asset electricity usage grew by more than 67% from July 2021 to January 2022, and then fell by 17% by August 2022, demonstrating the high volatility of crypto mining energy demand, based on the 2022 OSTP report published by the White House Office of Science and Technology Policy.
Texas crypto-asset mining in 2022 used approximately 3% of local peak electricity demand, with the OSTP projecting that Texas could see an additional 25 gigawatts of new electricity demand from crypto-asset mining over the following decade, based on the 2022 OSTP report.

Deductible Expenses for Business Miners

Under IRC Section 162, business miners may deduct all ordinary and necessary expenses paid or incurred during the taxable year in carrying on the mining trade or business, including electricity, repairs, rental space, and equipment, based on IRS Notice 2014-21, which references Section 162 and the general business expense framework.
IRS Publication 946 establishes that mining hardware, including ASIC rigs, GPUs, and cooling equipment, is classified as 5-year property under the Modified Accelerated Cost Recovery System (MACRS), allowing accelerated depreciation over that recovery period, based on IRS Publication 946 published by the Internal Revenue Service.
For tax years beginning in 2025, the maximum Section 179 expense deduction for qualifying business property is $2,500,000, with the phase-out threshold beginning at $4,000,000 in total qualifying purchases, and with the deduction completely phasing out at $6,500,000 in purchases, based on IRS Publication 946.
For tax years beginning in 2026, the maximum Section 179 expense deduction increases to $2,560,000, with the phase-out threshold adjusted to $4,090,000, based on IRS Publication 946 published by the Internal Revenue Service.
The One Big Beautiful Bill Act, signed into law in 2025, reinstated 100% bonus depreciation for certain qualified property acquired and placed in service after January 19, 2025, allowing business miners to deduct the full cost of qualifying mining equipment in the year placed in service, based on the 2025 Instructions for Form 4562 published by the Internal Revenue Service.
Prior to restoration by the One Big Beautiful Bill Act, the bonus depreciation rate had phased down to 40% for qualifying property placed in service after December 31, 2024 and before January 1, 2026 under the prior TCJA schedule, based on the 2025 Instructions for Form 4562 published by the Internal Revenue Service.
The Tax Cuts and Jobs Act of 2017 suspended miscellaneous itemized deductions including hobby expense deductions under IRC Section 67(g) for tax years beginning after December 31, 2017 and before January 1, 2026, meaning hobby miners who cannot qualify as a business have been unable to deduct electricity, equipment, or other mining costs since 2018, based on IRS TCJA guidance for individuals published by the Internal Revenue Service.
Business miners who operate as sole proprietors must complete Form 4562 (Depreciation and Amortization) and attach it to Schedule C when claiming Section 179 deductions or bonus depreciation on mining equipment, based on the 2025 Instructions for Form 4562 published by the Internal Revenue Service.

Publicly Traded Mining Company Cost and Revenue Data

Riot Platforms reported cost of power for self-mining operations of $149.0 million in fiscal year 2024, compared to $89.1 million in 2023 and $54.3 million in 2022, reflecting an increase of approximately 67% year over year in power costs, based on Riot Platforms’ 2024 Form 10-K filed with the Securities and Exchange Commission.
Riot Platforms reported Bitcoin miner depreciation of $155.5 million in fiscal year 2024, compared to $216.6 million in 2023, based on the 2024 Form 10-K filed by Riot Platforms, Inc. with the Securities and Exchange Commission.
Riot Platforms reported total cost of revenue for self-mining operations, net of power curtailment credits and excluding depreciation, of $155.5 million in fiscal year 2024, based on the 2024 Form 10-K filed by Riot Platforms, Inc. with the Securities and Exchange Commission.
Riot Platforms reported an all-in power cost of 3.4 cents per kilowatt-hour across all facilities during fiscal year 2024 and mined 4,828 Bitcoin during the year at an average direct cost of $32,216 per coin, based on the 2024 Form 10-K filed by Riot Platforms, Inc. with the Securities and Exchange Commission.
Riot Platforms received power curtailment credits of $33.7 million in fiscal year 2024 through participation in ERCOT Demand Response Service Programs, compared to $71.2 million in 2023 and $27.3 million in 2022, based on the 2024 Form 10-K filed by Riot Platforms, Inc. with the Securities and Exchange Commission.
MARA Holdings reported total revenues of $656.4 million in fiscal year 2024, a 69% year-over-year increase, operating income of $306.1 million, and net income of $541.0 million, with the company operating approximately 400,000 mining rigs globally at an energized hashrate of approximately 53.2 exahashes per second as of December 31, 2024, based on the 2024 Form 10-K filed by MARA Holdings, Inc. with the Securities and Exchange Commission.
MARA Holdings mined 9,430 Bitcoin during fiscal year 2024, based on the 2024 Form 10-K filed by MARA Holdings, Inc. with the Securities and Exchange Commission.
MARA Holdings acquired five operational data centers and launched a 25 MW micro data center operation utilizing excess flared natural gas from oil wellheads in Texas and North Dakota during fiscal year 2024, converting stranded energy into mining operations, based on the 2024 Form 10-K filed by MARA Holdings, Inc. with the Securities and Exchange Commission.

Enforcement and Compliance Statistics for Mining

IRS-CI identified more than $9.1 billion in fraud from tax and financial crimes and seized approximately $1.2 billion in criminal assets during Fiscal Year 2024, based on the 2024 IRS Criminal Investigation Annual Report.
IRS-CI seized 2.35 petabytes of digital data in Fiscal Year 2025, a nearly 60% increase from the previous fiscal year, based on the 2025 IRS Criminal Investigation Annual Report published by the Internal Revenue Service.
Using Bank Secrecy Act data across Fiscal Years 2022 through 2024, IRS-CI identified $21.1 billion in fraud tied to tax and financial crimes and seized $8.2 billion in criminal assets, based on a 2025 BSA metrics release published by the Internal Revenue Service.
The IRS identified a 75% noncompliance rate among taxpayers it had identified through records retrieved from digital currency exchanges, based on a 2023 IRS announcement cited in a 2024 brief published by Deloitte Tax LLP.
The projected gross tax gap for tax year 2022 was $696 billion, with the IRS acknowledging that this figure does not fully represent noncompliance associated with digital assets, including mining income, based on a 2024 report published by the U.S. Department of the Treasury.
The IRS added 2 private-sector cryptocurrency and digital asset experts as executive advisors in February 2024 to lead compliance and enforcement programs focused on digital assets, based on a 2024 news release published by the Internal Revenue Service.
Computing accounted for an estimated 8% of commercial sector electricity consumption in 2024 and is projected to grow to 20% by 2050, encompassing cryptocurrency mining, AI, and data center operations, based on the Annual Energy Outlook 2025 analysis published by the U.S. Energy Information Administration.