Airdrop Tax Calculator

When an airdrop becomes income in the US

The IRS treats an airdrop as ordinary income equal to the tokens' fair market value "when it is received, which is when the transaction is recorded on the distributed ledger, provided you have dominion and control over the cryptocurrency so that you can transfer, sell, exchange, or otherwise dispose of" it (IRS virtual currency FAQ, answers 24 and 25; Rev. Rul. 2019-24). For a claim-based drop that is usually when you claim; for tokens that arrive locked, when they unlock. The amount you report as income becomes your basis, so the same value is not taxed twice when you sell.

The ruling is written about an airdrop that follows a hard fork, and that is the only kind the IRS has ruled on by name. Tax advisers and tax software apply the same rule to the airdrops most people chase today, for points, testnet use or holding a token, since the general rule that income is any accession to wealth you control covers them. The calculator does the same. Nothing is income until you have the tokens: being told you are eligible, or holding points, is not a receipt.

Income from the drop goes on Schedule 1, and a sale on Form 8949, and you answer "Yes" to the digital asset question on Form 1040 for any year you received or sold one (IRS, digital assets). An exchange you sell through will report the proceeds to you and the IRS on Form 1099-DA; it will not know what the drop was worth when it reached your wallet, so keep that figure yourself. Crypto airdrop taxes and when you owe them goes through the records to keep.

Selling: short-term, long-term and losses

The gain or loss is what the sale brought in, less its fees, minus the value you reported as income. Held for one year or less it is short-term and taxed at the same rates as wages; held more than a year it is long-term and taxed at 0%, 15% or 20%, stacked on top of your other taxable income. The holding period starts the day after you received the tokens and includes the day you sell (IRS Publication 544), so a drop claimed on 10 March 2025 is long-term from 11 March 2026.

A token that falls after it lands gives a capital loss. Losses first cancel gains; what is left takes up to $3,000 a year off your other income, and the rest carries over to the next year, and on from there until it is used (Publication 544). The income tax on the drop stays as it was: a fall after the day it landed comes back only through that loss, slowly, which is how people end up owing more than a crashed token is worth. The scenario table under the calculator shows it for your drop.

On top comes the 3.8% net investment income tax on gains, once modified adjusted gross income passes $200,000 single or head of household, or $250,000 married filing jointly; the thresholds are not indexed (IRS Topic 559).

The 2026 figures the calculator uses

Brackets and the capital gains amounts from Rev. Proc. 2025-32, sections 4.01 and 4.03; standard deductions from the IRS release of the 2026 adjustments. Married filing separately is not offered. The state box applies one flat rate to the drop and the gain (less any loss used), a rough stand-in: most states tax both as income, some have no income tax, and a few tax gains differently.

A worked example the calculator has to match

The calculator's defaults: single, $65,000 of other income, 2,000 tokens worth $1.00 each when claimed in February 2026, all sold in June for $0.40 each with $5 of fees.

The loss gives back less than the drop cost, because the income was taxed at 22% at the top and the loss comes off at 12%. Had the same tokens been sold for $1.50 each instead, the $995 short-term gain after fees would add $218.90 at 22%.

The UK: income tax only for doing something

HMRC says income tax "will not always apply to airdropped tokens received in a personal capacity". It may not apply when they are received "without doing anything in return (for example, not related to any service or other conditions)", and outside a trade. Airdrops "provided in return for, or in expectation of, a service are subject to Income Tax", as miscellaneous income (HMRC Cryptoassets Manual, CRYPTO21250). A drop for tasks, quests, points or testnet activity sits on the income side; tokens that turn up unasked, or for simply holding another token, usually do not. Income is taxed at its value in pounds on the day you received it.

Either way, selling is a disposal for Capital Gains Tax, "even if it's not chargeable to Income Tax when it's received" (CRYPTO21250). The tokens go into their own section 104 pool, or into the pool of that token you already hold (CRYPTO22350); the calculator assumes you held none before.

The cost of the tokens. HMRC's manual does not spell out the allowable cost of an airdrop. For one taxed as income, the calculator uses the value taxed, so the same value is not taxed twice. For one received for nothing, it uses nil: the market value rule does not apply to an acquisition with no corresponding disposal and no consideration (Taxation of Chargeable Gains Act 1992, s.17(2)), so the whole sale is the gain. If your figure is large, ask an adviser which applies to your drop.

From GOV.UK: Income Tax rates and allowances, Capital Gains Tax rates and allowances. The calculator matches both of GOV.UK's worked examples (taxable income of £20,000 with gains of £12,600 pays £1,728; with gains of £52,600, £10,842). Scottish income tax rates are not used. Two UK traps it shows: income between £100,000 and £125,140 is taxed at an effective 60% as the allowance goes, so a £10,000 paid-for drop on a £100,000 salary costs £6,000; and a capital loss can only be set against gains, this year or later, never against income, and has to be claimed within four years of the end of the tax year (GOV.UK).

What to do on the day it lands

• Write down the price. The time you claimed or the tokens unlocked, the number of tokens and their price then, from the market where it trades. It is the figure everything else hangs on, and nobody reports it for you.
• Set aside the tax. The "price that covers the tax" line under "Still holding" is where selling everything would only just pay the bill. Plenty of drops trade below their first price within weeks, and the income tax does not fall with them.
• Claim from the right wallet, safely. How to claim an airdrop safely once you qualify and blind signing and claim drainers cover the claim itself; the signature checker reads what a claim page asks you to sign.
• Farming several wallets? Each wallet's drop is your income all the same, added together for the year. How many wallets is too many covers the other side of that.

What the calculator leaves out

One drop at a time, with no other gains or losses in the year, the US standard deduction and no credits or alternative minimum tax. A drop received as part of a business, or so often that it is a trade, is taxed differently in both countries. Tokens you swap rather than sell for cash are a disposal too, valued in dollars or pounds at the time. Married filing separately, Scottish rates, US states' own brackets and other countries are not covered.

General information, not tax advice. Have an accountant who works with crypto check large or unusual drops.