Earnings from cryptocurrency mining Any Bitcoin or other cryptocurrency you receive as a result of mining is considered ordinary business income by the IRS and is taxed at the ordinary income rate of the year you earned it. In some cases, your mining transactions may be reported to the IRS on Form 1099-NEC. Mined cryptocurrencies are taxed as income when earned and as capital gains when disposed of. You may be subject to additional state income taxes depending on where you live.
For business income, you declare the FMV of the cryptocurrency you have mined in Annex C and you also pay a 15.3% self-employment tax. You can also deduct some business expenses, as well as any capital losses from previous years, when you file your taxes this year. Unlike most types of earned income, miners don't have an employer who issues a W-2 form for gross income. Even mining companies, where several people mine together and share mining rewards, don't issue a 1099 form to miners.
In any case, mining revenues must be calculated correctly and reported in your taxes, so you need a detailed record of each mining reward, including the dates extracted and the FMV of those dates.