Suzan DelBene, a pro-crypto Democrat House Representative for Washington, has reintroduced a draft bill to exclude crypto users from paying taxes on transactions under $200. DelBene previously co-authored the renewed bill with her counterpart Representative for Miami David Scheiker in 2021.
In a draft bill dubbed “Virtual Currency Tax Fairness Act of 2022” tabled before the House of Congress, DelBene is seeking to amend provisions in the Internal Revenue Code of 1986 to exclude gains from the personal transaction of virtual currency. Upon approval, the renewed bill will stop the Internal Revenue Service (IRS) from needing United States residents to pay taxes on capital gains from crypto transactions over $200:
“Antiquated regulations around virtual currency do not take into account its potential for use in our daily lives, instead of treating it more like a stock or ETF.”
“Virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives. The U.S. must stay on top of these changes and ensure that our tax code evolves with our use of virtual currency.”
Although Congress has received similar versions of the bill on two different occasions, neither of them garnered upvotes. In 2017, Representative David Scheiker presented a bill exempting crypto transactions below $600 from taxes.
In 2021, legislators Scheiker and DelBene co-authored the current version under the same name, lowering the threshold to $200. Pro-crypto Representatives Darren Soto and Tom Emmer have co-sponsored the crypto proposals for the most recent iteration. While commenting about the recent amendment proposal, Emmer stated:
“As consumers increasingly use cryptocurrencies to complete everyday transactions, we must modernize their tax treatments. This common-sense bill will finally allow Americans to use their digital wallet as seamlessly as cash.”
The current U.S tax law requires crypto users to pay roughly 20% on capital gains. However, residents typically will not pay capital gains taxes for HODling digital assets. The proposed bill suggests that the tax code should apply for the transactions made after December 31, 2021. The deadline for residents to file taxes on both crypto and fiat income is April 18.
