Tax developments don’t always arrive neatly packaged around a single industry or type of taxpayer. Two recent changes speak exactly to that point. A new U.S. Tax Court decision addresses when cryptocurrency staking rewards become taxable, while an expansion of an existing tax credit could reduce income taxes for eligible salon, spa, barbershop, and other beauty industry employers.

Here’s what affected taxpayers need to know, starting with cryptocurrency staking rewards.

Receiving Crypto Staking Rewards? The Tax Timing Just Got Clearer

Some cryptocurrency owners can commit their tokens to help support the process a blockchain uses to validate transactions. In return for participating, they may receive additional cryptocurrency tokens as rewards. This process is known as “staking.”

If you receive those staking rewards, an important tax question follows: When do the new tokens become taxable? Is it when they arrive in your account, or when you eventually sell them for cash?

A June 2026 U.S. Tax Court decision provides an answer under the circumstances presented in the case. In Paschall v. Commissioner (PDF file), the Tax Court held that a cash-method taxpayer had to include cryptocurrency staking rewards in gross income when the taxpayer received the rewards and gained “dominion and control” over them.

For taxpayers who participate in cryptocurrency staking, that distinction has a practical consequence. Receiving cryptocurrency can create taxable income, even when you haven’t sold the tokens for dollars.

What Happened in the Paschall Case?

In Paschall v. Commissioner, Alvie and Patricia Paschall held a cryptocurrency named Cardano through an account that Mr. Paschall controlled with an electronic trading platform named eToro. The platform automatically enrolled its customers who held Cardano in its staking service, although they could opt out. The Paschalls stayed enrolled throughout 2021.

Each month, eToro added new Cardano tokens to Mr. Paschall’s account as staking rewards. Once those tokens reached the account, the Paschalls could keep them, transfer them elsewhere, or sell them for cash.

The IRS said the Paschalls should have reported $33,354 in staking rewards as income for 2021. They disagreed, leaving the Tax Court to decide when the rewards became taxable: when the tokens were received or when they were eventually sold.

Why “Dominion and Control” Matters

For cash-method taxpayers, income is typically reported in the earliest year in which it is actually or constructively received. With cryptocurrency, the ability to control the asset plays an important role in determining when that occurs.

The Tax Court in Paschall v. Commissioner found that the Paschalls had dominion and control over the Cardano staking rewards when they were received (i.e., they could access the tokens and sell them for cash without restriction). The rewards also increased both the Paschalls’ proportionate interest in the cryptocurrency and the value of that interest.

The Paschalls argued that tokens created through staking amounted to Continue reading… Continue reading… Continue reading…