v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Components of Provision for Income Taxes
$ in millions202520242023
Current
U.S. federal
$2,232 $2,011 $1,190 
State and local
601 660 542 
Foreign
1,535 1,244 1,314 
Total$4,368 $3,915 $3,046 
Deferred
U.S. federal
$394 $8 $(295)
State and local
91 (6)(59)
Foreign
76 150 (109)
Total$561 $152 $(463)
Provision for income taxes$4,929 $4,067 $2,583 

Reconciliation of U.S. Federal Statutory Income Tax to Effective Income Tax
Year Ended December 31,
$ in millions
202520242023
$%$%$%
U.S. federal statutory tax$4,610 21.0 %$3,695 21.0 %$2,481 21.0 %
State and local taxes1
430 2.0 378 2.1 292 2.5 
Foreign taxes
India
Capital gains tax115 0.5 205 1.2 50 0.4 
Other14 0.1 15 0.1 11 0.1 
Brazil
Capital gains tax17 0.1 21 0.1 347 2.9 
Other22 0.1 15 0.1 15 0.1 
Other jurisdictions252 1.1 161 0.9 80 0.7 
Changes in tax laws and rates— 0.0 15 0.1 — 0.0 
Cross-border taxes
12 0.1 30 0.2 47 0.4 
U.S. tax credits
General business credits
(260)(1.2)(295)(1.7)(285)(2.4)
Foreign tax credit
(28)(0.1)(50)(0.3)(375)(3.2)
Changes in valuation allowances9 0.0 14 0.1 (2)0.0 
Nontaxable or nondeductible items
Income/(loss) from affiliates
(413)(1.9)(368)(2.1)(241)(2.0)
Employee share-based compensation
(167)(0.8)(71)(0.4)(138)(1.2)
Other30 0.1 36 0.2 79 0.7 
Unrecognized tax benefits
99 0.5 77 0.4 66 0.6 
Other
Proportional amortization
187 0.9 189 1.1 156 1.3 
Effective tax
$4,929 22.5 %$4,067 23.1 %$2,583 21.9 %
1.Amounts are net of U.S. federal income tax benefits. The tax effects in this category were primarily related to New York State and City in 2025, 2024 and 2023.
Income Taxes Paid, Net of Refunds
$ in millions
202520242023
U.S. federal
$1,501 $452 $408 
State and local
New York State
   * 111 *
New York City
*126 *
Other
433 96 233 
Foreign
U.K.
441 200 257 
India
189 235 126 
Brazil
*99 382 
Japan
**179 
Germany
**153 
Other
940 566 297 
Total
$3,504 $1,885 $2,035 
*The amount of incomes taxes paid during the year does not meet the 5% disaggregation threshold and has been included in the relevant Other category above.
Deferred Tax Assets and Liabilities
$ in millions
At
Dec 31,
2025
At
Dec 31,
2024
Gross deferred tax assets
Net operating loss and tax credit carryforwards$265 $236 
Employee compensation and benefit plans2,597 2,565 
Allowance for credit losses and other reserves802 796 
Valuation of net trading inventory, investments and receivables1,668 1,808 
Other142 223 
Total deferred tax assets5,474 5,628 
Less: Deferred tax assets valuation allowance229 214 
Deferred tax assets after valuation allowance$5,245 $5,414 
Gross deferred tax liabilities
Fixed assets1,161 801 
Intangibles and goodwill1,844 1,931 
Total deferred tax liabilities$3,005 $2,732 
Net deferred tax assets$2,240 $2,682 
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse.
The Firm believes the recognized net deferred tax assets (after valuation allowance) at December 31, 2025 are more likely than not to be realized based on expectations as to future taxable income in the jurisdictions in which it operates.
The earnings of certain foreign subsidiaries and affiliates are indefinitely reinvested due to regulatory and other capital requirements in foreign jurisdictions. As of December 31, 2025 and December 31, 2024, the unrecognized deferred tax liability attributable to indefinitely reinvested earnings is $490 million and $405 million, respectively.
Rollforward of Unrecognized Tax Benefits
$ in millions202520242023
Balance at beginning of period$1,305 $1,244 $1,129 
Increases based on tax positions related to the current period211 202 147 
Increases based on tax positions related to prior periods78 132 141 
Decreases based on tax positions related to prior periods(30)(52)(73)
Decreases related to settlements with taxing authorities(2)(174)(79)
Decreases related to lapse of statute of limitations(44)(47)(21)
Balance at end of period$1,518 $1,305 $1,244 
Net unrecognized tax benefits1
$1,347 $1,159 $1,090 
1.Represent ending unrecognized tax benefits adjusted for the impact of the federal benefit of state issues, competent authority arrangements and foreign tax credit offsets. If recognized, these net benefits would favorably impact the effective tax rate in future periods.
Interest Expense (Benefit) and Penalties Associated with Unrecognized Tax Benefits, Net of Federal and State Income Tax Benefits
$ in millions202520242023
Recognized in income statement$109 $92 $65 
Accrued at end of period364 255 237 
Interest and penalties related to unrecognized tax benefits are recognized as a component of the provision for income taxes.
Earliest Tax Year Subject to Examination in Major Jurisdictions
Jurisdiction
Tax Year
U.S.2017
New York State and New York City2010
U.K.2014
Japan2021
Hong Kong2018
The Firm is routinely under examination by the IRS and other tax authorities in certain countries, such as the U.K., and in states and localities in which it has significant business operations, such as New York.
The Firm believes that the resolution of these tax examinations will not have a material effect on the annual financial statements, although a resolution could have a material impact in the income statement and on the effective tax rate for any period in which such resolutions occur.