Kraken 1099-DA Tax Guide 2026

Kraken is one of the oldest and most trusted crypto exchanges in the United States. US investors use it for spot trading, staking, futures, and access to a growing ecosystem of crypto products. But when tax season arrives, most Kraken users discover that their tax situation is more complicated than they expected.

From my experience working with US clients at CountDeFi, the majority of Kraken tax problems do not come from aggressive trading or bad intent. They come from misunderstanding what Kraken does and does not provide for tax purposes. And this year, with Form 1099-DA issued for the first time, that misunderstanding is more consequential than ever. This guide covers everything a US-based Kraken user needs to know before filing.

Does Kraken Report Crypto Taxes to the IRS?

Yes. Kraken is a crypto exchange subject to IRS reporting rules under the Infrastructure Investment and Jobs Act. It has complied with IRS reporting requirements for years. In the past, the IRS obtained Kraken user data through John Doe summonses. Under current IRS rules, Kraken is expected to issue Form 1099-DA to US clients and report gross proceeds from digital asset sales directly to the IRS starting with the 2025 tax year.

Reporting thresholds and implementation details continue to evolve as the IRS phases in the new framework. The direction is clear: the IRS now has significantly more visibility into your Kraken activity than at any previous point.

What Kraken Tax Forms Will US Users Receive? US Kraken users may receive two separate forms depending on their account activity.

Kraken Form 1099-DA

Form 1099-DA is a new IRS form introduced specifically for digital assets. It is being issued for the first time for the 2025 tax year. Under current IRS rules, you should expect to receive it if you:

• Sold crypto for USD on Kraken during 2025
• Traded one crypto for another on Kraken during 2025
• Otherwise disposed of a digital asset on Kraken during 2025

If you only bought and held crypto on Kraken without selling or trading, you will not receive a 1099-DA.

Kraken 1099-DA April 2026 Update

Your Kraken 1099-DA will include:

• Your name, Taxpayer Identification Number, and address
• Account name and identifiers
• The name and code of each digital asset sold
• The number of units sold
• The acquisition date and sale date
• Gross proceeds from each transaction
• Aggregated sections for stablecoins and NFTs

Kraken Form 1099-MISC — Staking and Reward Income

You will receive a 1099-MISC if you earned $600 or more in rewards during 2025.

Kraken 1099-Misc covers

• Staking rewards
• Referral bonuses
• Promotional income

For income reporting purposes, the 1099-MISC is often more complete than your 1099-DA, as it covers specific income categories rather than gross proceeds from disposals. The $600 threshold matters. If you earned under that amount, Kraken will not issue the form, but you are still required to report that income to the IRS.

Where to Find Your Kraken 1099 Tax Forms

Tax forms including Kraken's Form 1099-DA are only accessible via the Kraken website, for download. They are not available on the mobile app.

To access your Kraken tax forms

• Log in to your Kraken account on the desktop site
• Navigate to the Documents section
• Look for Tax Statements

Why Your Kraken Form 1099-DA Is Probably Incomplete

This is the part most guides skip over. Your 1099-DA is an informational form. It is not a complete picture of your tax liability. Under current IRS rules for the 2025 tax year, Kraken is only required to report gross proceeds from your sales. Cost basis reporting is not required until the 2026 tax year, and under current guidance applies only to assets acquired in 2026 or later.

Gross proceeds are not your gain. They are the total amount you received before accounting for what you originally paid. If you file based on those numbers without supplying your own cost basis, you will almost certainly overpay tax.

The Kraken 1099-DA Cost Basis Problem

The cost basis problem compounds if you transferred crypto into Kraken from another exchange or wallet. Kraken has no visibility into transactions that happened on other platforms.

A common scenario: you bought Bitcoin on Coinbase three years ago and transferred it to Kraken to sell. Kraken reports the full sale proceeds with no acquisition cost attached. The IRS sees what looks like a near-100% gain. You are responsible for providing the correct original cost basis on your return.

Covered vs Non-Covered Assets on Kraken

Understanding the difference between covered and non-covered assets is essential for filing correctly.

Non-covered assets on your Kraken 1099-DA include:

• Any crypto acquired before January 1, 2026
• Any crypto transferred into Kraken from an external wallet or another exchange

For these, the cost basis column will be blank, zero, or marked as unknown. If section 1g of your form says unknown, cost basis was not reported.

Covered assets — meaning crypto acquired and held entirely on Kraken from January 1, 2026 onward — will have full cost basis reporting starting with the 2026 tax year forms issued in 2027, under current IRS guidance.

Kraken API Limitations That Create Tax Problems

Many Kraken users connect the API to crypto tax software and assume the data is complete. It is not. In our experience at CountDeFi, incomplete data imports are a leading source of Kraken filing errors, though every situation is different.

The key Kraken API limitations to know:

• The Kraken API only provides transaction history for the last two years
• Sub-account trade history is only available for the last six months via API
• Staking rewards, referral bonuses, and certain income events require separate data exports
• Mobile app transaction history requires a separate Kraken App integration or manual CSV export

The result of relying on API data alone:

• Missing crypto trades from more than two years ago
• Incorrect cost basis on older positions
• Underreported income from staking or referral programs
• Tax reports that do not reflect your actual activity

Users connect the API, get a report that looks plausible, and file. The gaps only surface later, often when an IRS notice arrives.

Critical 2025 Change: Kraken Wallet-by-Wallet Cost Basis Tracking

This is a change many Kraken users are not aware of. Under Revenue Procedure 2024-28, the IRS introduced wallet-by-wallet cost basis tracking requirements effective January 1, 2025. You must now track cost basis separately for each wallet and exchange account rather than applying a pooled basis across platforms.

You cannot pool your Bitcoin across Kraken, Coinbase, and a hardware wallet and apply a single blended cost basis when you sell. Each account is treated separately under current IRS rules.

This change can significantly affect your tax liability depending on which wallet holds your highest or lowest cost basis assets. The IRS safe harbor for reallocating cost basis across wallets required documentation by December 31, 2024. If you missed that deadline, wallet-by-wallet tracking still applies without safe harbor protection.

How Kraken Products Are Taxed in the US

Kraken Spot Trading Tax Treatment

Every sale of crypto for USD is a taxable event. Every crypto-to-crypto swap is a taxable event. Gains and losses are capital in nature.

• Assets held more than one year qualify for long-term capital gains rates of 0%, 15%, or 20% depending on your income
• Assets held one year or less are short-term gains, taxed as ordinary income

Kraken does not reliably calculate cost basis for assets deposited from another exchange or wallet. You are responsible for maintaining accurate records.

Kraken Staking Rewards Tax Treatment

Staking is one of Kraken's most popular features for US users. The tax treatment is clear under Revenue Ruling 2023-14:

• Staking rewards are ordinary income when you gain dominion and control over them
• The fair market value in USD at the time of receipt determines your taxable income
• When you later sell those rewards, a second taxable event occurs
• You calculate capital gain or loss from the value at which you received them to the price at which you sold

Common mistake: reporting staking rewards only when sold, not when received. This is incorrect under current IRS guidance and creates audit risk.

Kraken Referral and Promotional Rewards Tax Treatment

Referral bonuses, affiliate rewards, and promotional income are all ordinary income when received. Each payout is a separate income event that must be tracked.

• USDC and stablecoin payouts are taxable when received
• Daily payouts create many small taxable events, not one annual event
• Converting, selling, or spending those rewards later is also a taxable event

Kraken Futures and Derivatives Tax Treatment

Kraken may issue Form 1099-B if you traded regulated futures or options contracts. This form reports:

• Profit or loss on closed contracts
• Unrealized profit or loss on open contracts
• Aggregate profit or loss

Futures contracts may be treated as Section 1256 contracts under IRS rules, with a 60/40 split between long-term and short-term gains regardless of holding period. This area is complex. Professional review is typically required.

How to Report Kraken Taxes on Your US Tax Return

Forms Required for Kraken Capital Gains

• Form 8949: report each sale or disposal with your corrected cost basis
• Schedule D: totals from Form 8949 carry here
• Form 1040: Schedule D feeds into your main return

When completing Form 8949, select the checkbox indicating whether cost basis was or was not reported to the IRS. For most Kraken transactions in the 2025 tax year, cost basis was not reported under current IRS rules.

Forms Required for Kraken Ordinary Income

• Schedule 1 for most individuals reporting staking rewards, referral bonuses, and promotional income
• Schedule C if you are operating as a business

The Digital Asset Question on Your 1040

Every US tax return now includes a question about digital asset activity. You must answer it truthfully. Answering no when you had taxable crypto activity is a red flag for IRS enforcement.

Common Kraken Tax Mistakes to Avoid

• Not reporting staking rewards as income when received, only when sold
• Treating crypto-to-crypto swaps as non-taxable because no USD was involved
• Using zero or incorrect cost basis for assets transferred in from other platforms
• Relying solely on 1099-DA figures without supplying corrected cost basis on Form 8949
• Missing transactions due to Kraken's two-year API limitation
• Assuming stablecoins are tax-free — every disposal is a taxable event
• Not transitioning to wallet-by-wallet cost basis tracking for 2025 activity
• Failing to track daily reward payouts individually

Kraken IRS Audit Risks

There is a pattern to how Kraken tax problems tend to develop.

Year one. You trade on Kraken, stake some assets, collect referral rewards. You handle taxes yourself. Standard tax software does not handle crypto well. You file something incomplete or skip reporting certain activity.

Year two. You connect your Kraken API to crypto tax software. You get a report. The numbers look reasonable. You file. But the software did not pull trades from three years ago. It missed staking rewards from the mobile app. It could not account for the ETH you transferred in from Coinbase. The cost basis is wrong on half your positions and you do not know it yet.

Year three or later. A CP2000 notice arrives from the IRS. Or you try to sell a large position and realise your cost basis records are a mess. Or your portfolio has grown to the point where errors have real financial consequences.

The longer this goes unaddressed, the harder and more expensive it becomes to fix Kraken tax problems.

When Crypto Tax Software Is Enough, and When It's Not

For Kraken taxes, tax calculators and software can work well if:

• You traded only on Kraken with no transfers in from other platforms
• You have a small number of transactions per year
• You have no staking, referral, or reward activity
• Your total portfolio is modest

You likely need professional help if:

• You have used Kraken alongside other exchanges, wallets, or DeFi protocols
• You have years of transaction history that may be incomplete
• You have transferred assets between platforms and cannot account for original cost basis
• Your portfolio has grown to the point where errors have real financial consequences
• You have received IRS correspondence or are concerned about receiving it
• You want your tax position to be audit-ready, not just probably fine

IRS Penalties for Incorrect Kraken Tax Reporting

The IRS has significantly increased crypto enforcement. Form 1099-DA means the agency now receives exchange data it can match against your return automatically. Consequences for incorrect or incomplete reporting may include:

• CP2000 notices for unreported income identified through 1099 matching
• Accuracy-related penalties of 20% of the underpayment
• Failure-to-file penalties of 5% per month up to 25%
• Interest on unpaid taxes
• Criminal prosecution in cases of willful evasion

The IRS can audit up to six years back in cases of substantial understatement. Keep records accordingly.

Kraken Tax Reporting in 2026 and Beyond

The regulatory landscape continues to evolve. Key changes on the horizon for Kraken users under current IRS guidance:

• Full cost basis reporting on Form 1099-DA is expected to begin with 2026 transactions
• Assets acquired and held on Kraken from January 1, 2026 onward should have cost basis reported to the IRS when sold
• Backup withholding of 24% may apply if you have not verified your tax status with Kraken via a W-9 form
• Potential changes to staking reward treatment remain under congressional review, current IRS guidance under Revenue Ruling 2023-14 remains in effect

More reporting does not mean less responsibility. Even with fuller cost basis reporting, you are still required to ensure the figures are accurate and complete.

Where Can Kraken Investors Get Crypto Tax Help?

Your Kraken 1099-DA tells the IRS what you sold. It does not tell the IRS what you owe. That calculation depends on complete and accurate cost basis records that you are responsible for maintaining.

If you have been moving crypto between platforms, staking, trading frequently, or holding assets bought years ago, the gap between what your 1099-DA shows and what you actually owe could be significant in either direction.

At CountDeFi, this is all we do. We work with US crypto investors whose tax situations go beyond what software can handle on its own.

• Transaction reconstruction: CountDeFi rebuild complete transaction histories across every exchange, wallet, and DeFi protocol you have ever used, including data that APIs miss
• Cost basis reconciliation: CountDeFi calculates accurate cost basis for every disposal, including assets transferred in from other platforms, staking rewards, and positions held across multiple years
• Wallet-by-wallet tracking: we apply the IRS wallet-by-wallet requirements correctly under Revenue Procedure 2024-28, so your cost basis is compliant from 2025 onward
• 1099-DA review: we cross-reference your Kraken 1099-DA against your actual records and identify discrepancies before they become IRS notices
• Audit-ready filing: every position documented, every calculation supported, every form prepared to withstand IRS scrutiny

Incorrect tax reporting boils down to a data problem. Data problems are exactly what we solve. If your Kraken tax situation is more complicated than a simple buy-and-hold, talk to CountDeFi before you file.