v3.25.4
Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2025
Income Tax Examination [Line Items]  
Income Tax Disclosure [Text Block] Income Taxes
The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses.
The components of income before income taxes, based upon tax jurisdiction, for the years ended December 31 are as follows:
(in millions)202520242023
Income before income taxes:  
Domestic$14,893 $28,264 $29,210 
Foreign(196)(8,193)(98)
Total income before income taxes$14,697 $20,071 $29,112 
The components of the provision for income taxes for the years ended December 31 are as follows:
(in millions)202520242023
Current Provision:  
Federal$1,381 $3,453 $4,418 
State and local598 416 716 
Foreign1,663 1,256 1,079 
Total current provision3,642 5,125 6,213 
Deferred Benefit:
Federal(1,149)(621)34 
State and local(227)18 2 
Foreign(376)307 (281)
Total deferred benefit(1,752)(296)(245)
Total provision for income taxes$1,890 $4,829 $5,968 
The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the year ended December 31, 2025 is as follows:
(in millions, except percentages)2025
Tax provision at the U.S. federal statutory rate$3,086 21.0 %
Foreign tax effects (a)(789)(5.3)
State income taxes, net of federal benefit (b)151 1.0 
Nontaxable or nondeductible items (c)(547)(3.7)
Other, net(11)(0.1)
Provision for income taxes$1,890 12.9 %
(a)Comprised primarily of tax rate differential in Ireland and tax attributes in Luxembourg.
(b)State taxes in California, Florida, New York and Massachusetts contributed to the majority of the tax effect in     this category.
(c)Comprised primarily of tax impacts of net portfolio divestitures.
The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the years ended December 31 are as follows:
(in millions, except percentages)20242023
Tax provision at the U.S. federal statutory rate$4,215 21.0 %$6,114 21.0 %
State income taxes, net of federal benefit343 1.7 567 2.0 
Share-based awards - excess tax benefit(96)(0.5)(75)(0.3)
Non-deductible compensation171 0.9 174 0.6 
Foreign rate differential(369)(1.8)(442)(1.5)
Tax effect of dispositions and other strategic transactions1,215 6.1 (29)(0.1)
Other, net(650)(3.3)(341)(1.2)
Provision for income taxes$4,829 24.1 %$5,968 20.5 %
Taxes Paid
A summary of total taxes paid for the year ended December 31, 2025 is as follows:
(in millions)2025
Domestic:
State and local premium taxes$2,371 
Payroll and other taxes2,062 
Federal income taxes1,209 
State and local income taxes316 
Total domestic taxes paid$5,958 
Domestic taxes paid as a percentage of total taxes paid73 %
Foreign:
Income taxes (a)$2,189 
Other taxes40 
Total foreign taxes paid$2,229 
Foreign taxes paid as a percentage of total taxes paid27 %
Total taxes paid$8,187 
(a)    Comprised primarily of taxes paid to Ireland.
Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The components of deferred income tax assets and liabilities as of December 31 are as follows:
(in millions)20252024
Deferred income tax assets:  
Accrued expenses and allowances$1,282 $1,055 
U.S. federal and state net operating loss carryforwards566 442 
Share-based compensation
210 189 
Nondeductible liabilities
355 343 
Lease liability
850 846 
Unrecognized tax benefits430 358 
  Net unrealized losses on investments326 669 
Other-domestic
291 239 
Other-non-U.S.
275 80 
Subtotal4,585 4,221 
Less: valuation allowances(478)(397)
Total deferred income tax assets4,107 3,824 
Deferred income tax liabilities:
U.S. federal and state intangible assets(4,347)(4,479)
Capitalized software
(152)(288)
Depreciation and amortization
(435)(400)
Prepaid expenses(333)(374)
Outside basis in partnerships
(402)(960)
Lease right-of-use asset
(800)(833)
Other-non-U.S.
(59)(110)
Total deferred income tax liabilities(6,528)(7,444)
Net deferred income tax liabilities$(2,421)$(3,620)
Valuation allowances are provided when it is considered more likely than not deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S. net operating loss carryforwards. Substantially all of the federal net operating loss carryforwards have indefinite carryforward periods; state net operating loss carryforwards expire beginning in 2026 through 2045, with some having an indefinite carryforward period. Additionally, as of December 31, 2025 and 2024, the Company has historical non-U.S. net operating loss carryforwards for which a deferred tax asset and valuation allowance of $5.2 billion and $4.1 billion, respectively, are not established because realization of the loss carryforwards is remote.
As of December 31, 2025, except for subsidiaries held for sale, the Company’s undistributed earnings from non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations, and therefore no U.S. deferred taxes have been recorded. Taxes payable on the remittance of such earnings would be minimal.
A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31 is as follows:
(in millions)202520242023
Gross unrecognized tax benefits, beginning of period$4,123 $3,716 $3,081 
Gross increases:   
Current year tax positions
926 578 782 
Prior year tax positions
583 10 97 
Gross decreases:   
Prior year tax positions
(6)(121)(212)
Statute of limitations lapses and settlements(5)(60)(32)
Gross unrecognized tax benefits, end of period$5,621 $4,123 $3,716 
The Company classifies net interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Statements of Operations. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $104 million, $210 million and $177 million of net interest and penalties, respectively. The Company had $741 million and $637 million of accrued interest and penalties for uncertain tax positions as of December 31, 2025 and 2024, respectively. These amounts are not included in the reconciliation above. As of December 31, 2025, there were $2.8 billion of unrecognized tax benefits which, if recognized, would affect the effective tax rate.
The Company currently files income tax returns in the United States, various states and localities and non-U.S. jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the consolidated income tax returns for fiscal years 2016 and prior. The Company’s 2017 through 2023 tax years are under exam by the IRS, with the 2017 through 2020 tax years under the IRS’s Compliance Assurance Process. The Company is no longer subject to state income tax examinations prior to the 2015 tax year. The Company is subject to examination in non-U.S. jurisdictions for years 2015 and forward.