Kraken, a cryptocurrency exchange, has filed 56 million forms for cryptocurrency transactions with the US Internal Revenue Service for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less. Only 8.5% of the newly introduced Form 1099-DAs exceeded $600, the threshold that triggers reporting for non-employee compensation, with 74% being for less than $50. Each form is also sent to the customer, creating a reconciliation task for the taxpayer.
Standard tax software does not handle cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders. The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken identifies two issues with the tax code: the lack of a de minimis exemption for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt. The exchange is advocating for a broader inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed.