TN 182 (07-23)

SI 00830.102 Evaluating Virtual Currencies for SSI Income Determinations


A. Introduction to virtual currencies

Virtual currencies, a type of digital asset, are fungible digital tokens that can be digitally traded between individuals. Virtual-currency token units are exchangeable, interchangeable, and indistinguishable from other token units. Some may be used to purchase goods or services, or exchanged into U.S. dollars and other traditional or virtual currencies. Virtual currencies that have an equivalent value in traditional currency are referred to as convertible virtual currencies. The first virtual currency introduced and the most commonly traded is Bitcoin, but thousands of others are currently traded in the marketplace. Bitcoin is an example of a convertible virtual currency.

For SSI purposes, convertible virtual currencies are income or resources to the extent that a person can use them to meet food and shelter needs. Virtual currencies that are purchased with an individual’s own existing funds are not income, but a conversion of a resource.

For definitions and more information about digital tokens, see SI 01140.208B.

B. Policy for the income treatment of virtual currencies

Convertible virtual currencies, such as Bitcoin, are either earned or unearned income for SSI purposes when they can be readily exchanged into a currency with legal tender status or otherwise be used to meet a person’s food and shelter needs. The exchange value at the time the virtual currencies are received is countable income.

To be considered earned income, convertible virtual currencies must be:

  • paid as remuneration for work when an employee/employer relationship exists (wages);

  • paid as a royalty or honorarium that is earned income according to SI 00820.450; or

  • earned as a result of a valid self-employment activity (NESE).


    Virtual currency “mining” and "staking" are considered self-employment when done as a part of a trade or business. Some creators of non-fungible tokens (NFTs) may receive royalties which may be earned or unearned income depending on whether the person is engaging in a trade or business. For factors indicating the existence of a trade or business, see RS 01802.001 - RS 01802.010.

Virtual currencies that are not earned are unearned income. They are countable income unless an income exclusion applies (e.g., the infrequent or irregular income exclusion). For resource treatment of any retained virtual currency, see SI 01140.208.

Virtual currencies that are purchased with an individual’s own existing funds are not income, but a conversion of a resource from one form to another, per SI 00815.200. For example, if a recipient uses money from their savings account to purchase Bitcoin, the Bitcoin is not income in the month of purchase, but a resource that has changed its form.

C. Procedure for developing and documenting virtual currency income

When an individual or deemor alleges receipt of virtual currency:

  1. 1. 

    Request records from the individual showing the virtual currency transaction(s) in their virtual account (e.g., Bitcoin wallet, Coinbase account, Paypal, Venmo, etc.). Not all virtual currency accounts issue financial statements but the individual generally has the ability to generate and download a transaction history for a period of time and create financial statements. If there is no evidence available, accept the individual’s allegation as to the amount and date of the transaction on a signed statement or report of contact.

  2. 2. 

    Use an online currency converter that has an option to search current and past values to obtain the U.S. dollar value as of the date of receipt. For example, the linked currency converter allows technicians to specify dates to obtain past values.

  3. 3. 

    Follow existing income procedures to document the convertible virtual currency according to the type of income.


    • For virtual currency income received as remuneration for work, record income on a Wages page in the SSI Claim system.

    • When virtual currency income is earned as part of the person’s trade or business, document it as Net Earnings from Self-Employment (NESE) on the Self-Employment Income page.

    • For virtual currency income received as a royalty or honorarium and considered earned income, record the income to the Wages or Self-Employment page according to SI 00820.450.

    • When virtual currency income is assessed as unearned income, document it on the appropriate income page in the SSI claim system. For example, if the virtual currency is a gift or a prize, use the Other Income page to document it; if interest, use the Interest page to document, and if royalties, use the Royalties or Honorarium (Unearned) page to document.


      Virtual currency can earn and be considered interest income. For example, a payment of a virtual currency equivalent of 15 US dollars provided to a person as an incentive for opening a cryptocurrency account is considered interest. It is also possible for someone to earn interest on their existing virtual currency amounts. See SI 00830.500 for instructions on handling interest income.

  4. 4. 

    Document the exchange value results obtained from a currency converter and store any additional evidence electronically using the Evidence Portal.


    Document the evidence and exchange value results on a Report of Contact (e.g., DROC).

Do not count virtual currencies as income and a resource in the same month, per SI 01120.005. Virtual currencies are income when they are received and a resource when retained into the following month. See SI 01140.208 for resource information about virtual currencies and other digital assets. See SI 01110.600 for general information about resource conversions and resource determinations.

D. References


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SI 00830.102 - Evaluating Virtual Currencies for SSI Income Determinations - 07/05/2023
Batch run: 07/05/2023