Wages paid in cryptocurrency are subject to income tax withholding, Social Security, and Medicare tax at the fair market value of the crypto on the payment date, and are reported on Form W-2 like cash wages.
The employer’s payment of crypto is also a disposal of property, with gain or loss measured against its basis. Contractors paid in crypto receive a 1099-NEC at fair market value. Some states restrict paying wages in anything other than dollars.
Why it matters: withholding still has to be deposited in dollars, and many crypto-native businesses miss it.
IRS crypto audits and letters, unreported years, theft loss opinions, and returns that survive an audit.
See the practice page →Our tax attorneys handle IRS audits, crypto tax, offshore disclosures, and opinion letters for clients nationwide. Consultations are confidential.
Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
IRS letters, audits, unreported years, returns.
Foreign accounts, expats, offshore disclosure.
Audits, tax debt, criminal exposure, Tax Court.
Written analysis at a stated confidence level.
Asset protection for individuals and businesses; private company deals.
Attorney-reviewed returns and planning.
