Child support: Simple Essential Guide (2026)

If you mine crypto, two different questions can pull in opposite directions: how the IRS classifies the activity, and how a child support calculation counts the income. The good news is that both are easier to handle when you know what each one looks at. Below I use IRS materials and Massachusetts’s guidelines, and the example numbers are assumed.

Step One: What the IRS Says About Mined Coins

In Notice 2014-21, the IRS says that when a taxpayer successfully mines virtual currency, the fair market value of the currency as of the date of receipt is includible in gross income. The same notice says that if mining is a trade or business and the miner is not an employee, the resulting net earnings are subject to self-employment tax (IRS Notice 2014-21). The IRS digital assets page also lists income from mining on Schedule 1 (Form 1040) (IRS Digital Assets).

Business or Hobby for Tax

The IRS lists factors for deciding whether an activity is carried on for profit, including whether it is run in a businesslike manner with complete and accurate books and records, the time and effort put in, dependence on the income, personal motives such as enjoyment, other income to fund the activity, the expertise of the taxpayer and advisors, past profits in similar activities, profits in some years, and expected profit from appreciation of assets.

It states that no one factor is more important than another, and says income from an activity carried on with no intention of making a profit is reported on Schedule 1 of Form 1040, line 8 (IRS Tax Tip 2022-57). The IRS page “Know the difference between a hobby and a business” repeats the Schedule 1, line 8 reporting for activities with no profit motive (IRS).

A law-firm summary adds that expenses of an activity not engaged in for profit can’t be deducted under IRC §183, and that miscellaneous itemized deductions were suspended for tax years 2018 through 2025 (McLane Middleton).

Self-Employment Tax

The IRS says self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare), generally applied to 92.35% of net earnings, and usually applies once net earnings from self-employment reach $400 (IRS Topic 554).

A Worked Example (Assumed Numbers)

These figures are assumed. Say a miner receives coins worth $20,000.00 and spends $15,000.00 on electricity and related costs. As a business, net profit would be $5,000.00, and self-employment tax on that is $5,000.00 × 92.35% × 15.3% = about $706.48. As a hobby, per the sources above, the costs can’t be deducted, so the income to report is the full $20,000.00. Income tax rates are left out because they depend on your situation.

Assumed	Amount
Coins mined (value)	$20,000.00
Electricity and costs	$15,000.00
Net if business	$5,000.00
SE tax on net	$706.48

What Child Support Looks At

Massachusetts’s 2025 guidelines define self-employment income as “gross receipts minus ordinary and necessary expenses required to produce income,” and add that this amount “will differ from a determination of business income for tax purposes.” The commentary quotes the Appeals Court in Zoffreo v. Zoffreo: being permitted under the tax laws to deduct depreciation doesn’t mean those funds, which are not out-of-pocket expenses, are unavailable to pay child support (Massachusetts Child Support Guidelines, Section I).

My reasoning: the two numbers can differ. A tax deduction does not automatically carry over to the support calculation, and a documented out-of-pocket cost such as electricity may be treated differently from depreciation.

Why the Two Can Seem to Pull Apart

Using the assumed example, the tax return might show $5,000.00 of net business profit, while a support calculation that excludes a deduction it doesn’t recognize could start from a higher figure. In my view, that gap is the reason to track both numbers separately from the beginning.

How to Get Started With Crypto Mining Child Support

Record the coin value on the date you receive it. The IRS notice above uses fair market value as of the date of receipt.
Keep records of expenses, especially electricity, since an ordinary and necessary expense must be shown. That is my suggestion.
Keep books and records, since the IRS lists that as the first factor for a business. A simple spreadsheet is a good start in my view.
Track what you actually spent separately from what you deduct. In Massachusetts the two can count differently.

Crypto Mining Child Support: Questions Answered

Is the support figure the same as the tax return’s net income? Not in Massachusetts, according to its guidelines above.

Does mining always count as a business? No. The IRS says it depends on factors, and no one factor outweighs the others.

Does staking face the same question? The IRS digital asset FAQ I read does not address mining or staking directly (IRS digital asset FAQ), so I’m not making a claim.

My Take on Crypto Mining Child Support

In my view, good records are the most useful thing a miner can build, because they serve both the tax return and any support discussion.

Sources

This article offers general information and my own opinions, not financial, tax, or legal advice. The figures in worked examples are assumed. Laws, tax rules, and products change and can differ by location, so check current official sources and talk to a qualified professional about your own situation.

Crypto Mining Business Classification and Child Support Pull in Opposite Directions