Locked staking rewards are rewards that have been earned and credited to you but cannot yet be sold, exchanged or transferred. The lock can come from the protocol, from a vesting schedule, or from an exchange's fixed-term product, and it can apply to the rewards alone or to the rewards and the principal together.
Locks arise at three levels. A protocol may hold rewards until an epoch closes or a withdrawal queue clears, or add them to a bonded position that needs an unbonding period before it can be moved. A project may issue rewards under a vesting schedule, released in tranches over months. An exchange may run a fixed-term product where nothing, principal or reward, leaves until the term ends, and may add its own unbonding delay on top of the chain's.
The lock is a restriction on the reward, and it is distinct from a restriction on the principal. On some arrangements the rewards are liquid while the stake is bonded; on others it is the reverse. The exchange staking and delegated staking entries cover the mechanics; this one covers what the lock does to the tax date.
No. Revenue Ruling 2023-14 includes staking rewards in gross income in the taxable year in which the taxpayer gains dominion and control over them, and gaining dominion and control means having the ability to sell, exchange or otherwise dispose of the units. A reward that cannot yet be disposed of is not yet income. It becomes income when the restriction lifts, and it is valued at its fair market value on that date, not on the date it was earned or credited.
That has three consequences. The tax year can move: a reward earned in December under a lock that ends in February is income in the later year. The amount can move: a token that has fallen between credit and release produces less income, one that has risen produces more, and the basis of the units is the value at release either way. And the holding period starts at release, so a later sale counts its long-term year from then.
The restriction has to be a real one. A reward you have chosen not to claim, or not to withdraw, is not locked; it is under your dominion and control and income already. A reward the protocol or the exchange will not release, whatever you do, is locked. Product terms and protocol rules, dated, are the evidence that supports the later date.
Rewards imported at credit date instead of release date. Exchange histories and explorers show the reward at the moment it was credited to a locked balance, and software reads that line as income at that day's price. Where the lock crosses a year end, the income is reported a year early. Where the price moved during the lock, it is reported at the wrong amount, and the basis carried into the eventual sale is wrong by the same amount, so the error is paid twice.
Read our Are Crypto Staking Rewards Taxed? Yes, Here's How in 2026
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