How to file your USD Coin (USDC) taxes with Koinly

USD Coin (USDC) is a multi-chain, fiat-collateralized stablecoin, pegged at a 1:1 ratio with the US dollar. It's one of the most popular stablecoins, with a market cap of more than 42 billion, and billions are traded daily. Despite being pegged to the dollar, USDC is a crypto asset and therefore you might have a surprise tax bill in store. Don’t worry, Koinly can help you calculate taxes for USDC and thousands of other tokens, across multiple blockchains. Here’s how.

  1. Sign up to Koinly and choose your country and currency.

  2. Connect your blockchain(s) with Koinly to import all your trades safely and securely - including multi-chain tokens like USDC.

  3. Koinly identifies the cost basis of all your coins and tokens, as well as your taxable transactions.

  4. Koinly calculates any capital gains, losses, and income from your taxable transactions.

  5. Koinly generates your crypto tax report - ready to help you file with your tax office, or hand it over to your accountant.

How are UDSC transactions taxed?

From a tax perspective, it doesn’t matter that UDSC effectively works like a dollar - it’s still a crypto asset and therefore a kind of property, which means a couple of taxes may apply. Check out our crypto tax guides for specific information about crypto tax where you live but, generally speaking, two taxes may apply to your USDC transactions:

  • Capital Gains Tax:  When you sell, swap, or spend USDC, you may need to pay Capital Gains Tax on any gain you made as a result - even if it’s minimal.

  • Income Tax: When you earn USDC - for example, through staking rewards - you may need to pay Income Tax based on the fair market value of your USDC in your fiat currency at the point you received them.

Can the IRS track USDC?

As a top 10 cryptocurrency by market capitalization, it’s inevitable that the IRS is taking an interest in USD Coin. But how does the IRS track USDC and other cryptocurrencies?

Blockchains, other than private blockchains like Monero, are public ledgers. That means anyone, including the IRS and other tax offices, can search and find transactions relating to a specific public address.

All the IRS then needs to do is link your identity to a particular wallet.

There are a couple of ways the IRS can do this. One of the most common, and aggressive, is to issue John Doe summons to centralized crypto exchanges to compel them to share customer data, potentially including your verification details like your name and address, as well as details on any wallets you’ve transferred to using a centralized crypto exchange.

As well as this, many centralized crypto exchanges issue what’s known as a 1099 form - a form that reports income from sources other than your employer. You may receive a 1099 form if you’re earning over a certain amount in crypto, or if you’ve traded a certain volume of crypto. Whenever you get a 1099 form, the IRS gets an identical copy.

You can learn more about how the IRS tracks USDC and other crypto, here.

How to get USDC tax documents

The precise steps to calculate and report your USDC taxes depend on where you live and your tax office. But generally speaking, you’ll need to report any gains, losses, or income from USDC investments as part of your annual tax return.

This starts by calculating your USDC gains and losses - even if they’re minuscule - as well as the fair market value of any income from USDC in your fiat currency on the day you received it.

It can be very time-consuming, which is why most investors opt to use a crypto and USDC tax calculator like Koinly. Koinly can calculate your gains, losses, and income for hundreds of thousands of coins and tokens - including USD Coin.

All you need to do is connect your blockchain to Koinly and it’ll do the rest. Here’s how.

How to import USD Coin transactions to Koinly automatically

To import your USD Coin transactions into Koinly, you’ll need to connect each blockchain you use to interact with USDC to Koinly.

As USDC is a multi-chain token, this means you may need to connect to multiple blockchains in order to import your complete USD Coin transaction history, for example, Ethereum, Solana, and Avalanche.

This is really easy to do, you just need your public address from each blockchain - but remember, you’ll need to do this for each wallet you use to interact with USD Coin in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, and more.

You can find steps on how to connect a variety of popular wallets to Koinly on our integration pages, but here’s an example of how it generally works.

In your wallet

  1. Open or log in to your wallet

  2. Select the blockchain you’d like to connect to - for example, Ethereum or Solana

  3. Copy your public address

On Koinly

  1. Sign up or log in to your Koinly account and go to the wallets page

  2. Search for and select the blockchain you’d like to connect to - for example, Ethereum or Solana

  3. Give your wallet a name - for example - MetaMask or Phantom

  4. Paste your public address

  5. Select import


  1. Remember, you’ll need to do this for every wallet you use to interact with USDC (and any other tokens!) in order to calculate your crypto taxes correctly. As USDC is multi-chain, you’ll need to add your public address to Koinly from each blockchain (and wallet!) in order to import your complete USD Coin transaction history.

  2. It’s really helpful to name your wallets when you’re adding them to Koinly. If you need to troubleshoot later on, it can help you identify and fix issues much faster!

  3. You may also be able to upload your transaction history to Koinly as a CSV file instead of connecting using your public address if you prefer, but this depends on the wallet you’re using. You can search for your wallet on our integration pages to find out more about how to get a CSV file from your wallet.

Your frequently asked questions

What is USDC?
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