How to file your Tether (USDT) taxes with Koinly

Tether (USDT) is a multi-chain stablecoin, and the largest stablecoin by market capitalization with billions traded daily. USDT, despite being pegged to the USD and traded as dollars, is still considered a crypto asset, which means that investing in it may result in a tax liability. Koinly can help you calculate taxes for USDT as well as for 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 multichain tokens like USDT.

  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 Tether transactions taxed?

Despite being pegged to the USD - because your USDT is a crypto asset and therefore a kind of property, you may have tax implications from your investments. The tax implications vary depending on where you live, so read our crypto tax guides for more information. But, generally speaking, two taxes may apply to your Tether transactions:

  • Capital Gains Tax:  When you sell, swap, or spend USDT, 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 USDT - for example, through staking rewards - you may need to pay Income Tax based on the fair market value of your USDT in your fiat currency at the point you received them.

Can the IRS track USDT?

As one of the top three cryptocurrencies by market capitalization, you can bet the IRS is taking an interest in Tether. But how does the IRS track Tether and other cryptos?

Blockchains - excluding private blockchains like Monero - are a public ledger. That means anyone, including the IRS, can search and find transactions relating to a specific public address. All the IRS needs to do is be able to link your identity to a given wallet or transaction.

There are a couple of ways the IRS can do this. For starters, they’re using John Doe summons to compel centralized crypto exchanges to share customer data, potentially including details on any wallets you’ve transferred to using a centralized crypto exchange.

As well as this, to try and comply and avoid further IRS interest many centralized crypto exchanges issue what’s known as a 1099 form - a kind of 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 Tether and other crypto, here.

How to get Tether tax documents

Depending on where you live, you’ll generally need to report your gains, losses, and income from USDT investments in your annual tax return.

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

It’s time-consuming, which is why most opt to use a crypto and Tether tax calculator like Koinly. Koinly can calculate your gains, losses, and income for hundreds of thousands of coins and tokens - including Tether.

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

How to import Tether transactions to Koinly automatically

To import your Tether transactions into Koinly, you’ll need to connect each blockchain you use to interact with Tether to Koinly. As Tether is a multi-chain token, this means you may need to connect to multiple blockchains in order to import your complete Tether transaction history, for example, Ethereum, Binance Smart Chain and Tron.

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 Tether 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 Binance Smart Chain

  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 Binance Smart Chain

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

  4. Paste your public address

  5. Select import


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

  2. It’s really helpful to name your wallets when you’re adding them to Koinly. This can help you find any transactions you believe have errors later on much more easily!

  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 Tether?
How does Tether work?
Where can I buy Tether?
What is the purpose of using Tether?
Is Tether safe?
Is Tether a stablecoin?
Has Tether depegged before?
How is Tether different from other cryptocurrencies?
What is the total supply of Tether?
Is Tether regulated?
Can Tether be used for everyday purchases?
Is USDT 100% backed?
What blockchain is USDT on?
Is Tether a good investment?
Where can I stake Tether?
Is USDT better than BUSD, USDC, and other stablecoins?
Do I have to pay taxes on USDT?
What tax forms do I need to file for Tether transactions?