Ordinary income is income taxed at the regular graduated rates, including wages, business profit, interest, staking and mining rewards, airdrops, and short-term capital gains, as opposed to long-term capital gains taxed at lower rates.
Most crypto income other than long-term trading gains is ordinary: rewards, mining, payment for services, and gains on assets held one year or less.
Why it matters: the ordinary-versus-capital distinction is usually the largest driver of a crypto tax bill. See holding period.
Audits, penalties, collections, criminal exposure, and Tax Court, handled by attorneys who do this every day.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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