To comply with new U.S. Internal Revenue Service (IRS) regulations, Blockchain.com is updating its tax information collection and reporting processes. These new rules classify platforms like Blockchain.com as "brokers" of digital assets, which introduces new requirements for how we report customer transactions to the IRS.
What's Changing?
There are two key components to these new regulations that will affect your account.
1. Taxpayer Information Collection (Form W-9 & W-8)
Just like traditional financial institutions, we are now required to collect and verify taxpayer identification information from our customers.
- For U.S. Customers: You will be asked to provide your taxpayer identification number (TIN) by filling out a Form W-9.
- For Non-U.S. Customers that reside in US: You will be asked to certify your foreign status by providing a Form W-8.
To make this process simple and secure, we are partnering with Taxbit to help you submit this information.
2. New Tax Form: 1099-DA
Starting in 2026 (for the 2025 tax year), Blockchain.com will be required to issue a new tax form called Form 1099-DA to both you and the IRS.
This form will report the gross proceeds from your sales and exchanges of digital assets. Think of it as the cryptocurrency equivalent of Form 1099-B, which is used for reporting stock sales.
What Happens if I Don't Provide My Tax Info?
Submitting your W-9 or W-8 form is mandatory to comply with these new IRS rules.
If we do not have a valid, verified Form W-9 on file for a U.S. customer, we will be required by the IRS to apply backup withholding to your transactions.
- What is backup withholding? It is a measure the IRS uses to ensure taxes are paid on income.
- What is the rate? The current backup withholding rate is 24%.
- How does it work? This 24% would be withheld from the total gross proceeds of all your sale transactions and paid directly to the IRS.
Looking Ahead: Cost Basis Reporting
The next phase of these regulations will further simplify your tax preparation.
Starting in 2027 (for the 2026 tax year), we will also begin reporting your cost basis on the Form 1099-DA. The cost basis is the original value of your crypto when you acquired it, plus any associated fees.
Including this information will make it much easier for you and your tax professional to accurately calculate your capital gains or losses.
Disclaimer: Blockchain.com does not provide tax, legal, or financial advice. This article is for informational purposes only. We strongly recommend you consult a qualified tax professional to understand your personal tax situation and obligations.