v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company is subject to income taxes in the U.S. (both federal and state) and in numerous foreign jurisdictions. Changes in the tax laws or regulations in these jurisdictions, or in positions by the relevant authorities regarding their application, administration, or interpretation, may affect our tax liability, return on investments, and business operations.

The Tax Cuts and Jobs Act imposes tax on the Company for net controlled foreign corporation (“CFC”) tested income earned by certain non-U.S. subsidiaries (previously referred to as global intangible low-taxed income or “GILTI”). We have elected to account for net CFC tested income as a period cost. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into U.S. law, which includes significant changes to the federal income tax system. The Company has recorded the OBBBA tax impacts in its provision for income taxes for the year ended December 31, 2025, none of which are material to our financial statements.

Income From Continuing Operations Before Income Taxes
For the years ended December 31
202520242023
U.S. income
$1,028 $593 $816 
Non-U.S. income
1,740 1,988 1,545 
Total
$2,768 $2,581 $2,361 

Provision for Income Taxes
For the years ended December 31
202520242023
Current
U.S. Federal$4 $62 $171 
Non-U.S.
317 412 345 
U.S. State
8 8 42 
Deferred
U.S. Federal110 3 — 
Non-U.S.
131 (12)103 
U.S. State44 58 82 
Total$614 $531 $743 
The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate as follows.

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate
For the year ended December 31, 2025
Amount
Percent
Income from continuing operations before income taxes
$2,768 
Tax expected at 21%
581 21.0 %
State and local income taxes, net of federal income tax effect(1)
41 1.5 %
Foreign tax effects
  China30 1.1 %
  Other foreign jurisdictions
54 2.0 %
Effect of cross-border tax laws
  Foreign-derived deduction eligible income
(49)(1.8)%
  Net CFC tested income
45 1.6 %
  Other5 0.2 %
Tax credits
  R&D tax credits
(28)(1.0)%
  Foreign tax credits
(81)(2.9)%
Changes in valuation allowances
9 0.3 %
Nontaxable or nondeductible items(2)
22 0.8 %
Changes in unrecognized tax benefits
(24)(0.9)%
Other adjustments
8 0.3 %
Effective tax rate$614 22.2 %
(1) In 2025, state and local income taxes in California, Illinois, New York, Florida, New Jersey, New York City, and Pennsylvania comprise more than 50% of state and local income taxes, net of federal income tax effect.
(2) The tax impact of any share-based compensation items are included in this category.

For the years ended December 31, 2024 and 2023, the effective income tax rate differs from the statutory federal income tax rate as follows.

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate
For the years ended December 31
20242023
Income from continuing operations before income taxes
$2,581 $2,361 
Tax expected at 21%
542 496 
Foreign operations
38 63 
Withholding taxes
34 28 
U.S. tax on foreign operations
(43)(35)
Uncertain tax positions
170 11 
R&D benefits
(51)(33)
State and local income taxes, net of federal income tax effect
49 24 
Valuation allowance
(281)19 
Spin-Off and separation costs
72 184 
Other
— (14)
Provision for income taxes
$531 $743 
Effective income tax rate
20.6%31.5%

For the years ended December 31, 2025 and 2024, included in State and local income taxes, net of federal income tax effect is $10 million and $35 million of expense related to revaluation of deferred tax assets as a result of changes in future apportionment and state tax rates based on the 2024 and 2023 as-filed tax returns. For the year ended December 31, 2023, the Spin-Off and separation costs line includes $59 million of expense related to revaluation of state deferred tax assets associated with the Spin-Off.
UNRECOGNIZED TAX BENEFITS.

The Company is subject to periodic tax audits by tax authorities in the U.S. (both federal and state) and the numerous countries in which we operate. While the Company currently is being audited, or remains subject to audit, in a number of jurisdictions for tax years 2004-2024, including China, France, Germany, India, Japan, Norway, the U.K., and the United States, we believe that there are no jurisdictions in which the ultimate outcome of unresolved issues or claims is likely to be material to the results of operations, financial position, or cash flows. We believe that we have made adequate provisions for all unrecognized tax benefits.

The balance of unrecognized tax benefits, the amount of related interest and penalties, and the portion that, if recognized, would reduce tax expense and effective tax rate are as follows.

202520242023
Balance at beginning of period
$551 $409 $465 
Additions for tax positions of the current year
5 4 — 
Additions for tax positions of prior years
43 181 156 
Reductions for tax positions of prior years
(108)(33)(203)
Settlements with tax authorities
(7)(4)(6)
Expiration of the statute of limitations
(21)(6)(3)
Balance at end of period
$463 $551 $409 

For the year ended December 31, 2025, the Additions for tax positions of prior years line includes $37 million of currency translation adjustments (“CTA”), and the Reductions for tax positions of prior years line includes $102 million related to a tax attribute that expired in 2025.

For the year ended December 31, 2024, the Additions for tax positions of prior years line includes $172 million of reserves established due to ongoing audits, of which $142 million was established against a net operating loss deferred tax asset. Also for the year ended December 31, 2024, the Reductions for tax positions of prior years includes CTA of $14 million and a reversal of $19 million related to various tax audits that were closed during the year.

For the year ended December 31, 2023, the Additions for tax positions of prior years line in the table above includes $134 million related to the Spin-Off. Also during the year ended December 31, 2023, a matter was closed with local tax authorities which resulted in the reversal of a net operating loss deferred tax asset and the related $183 million unrecognized tax benefit, which is included in the Reductions for tax positions of prior years line above.

Unrecognized Tax Benefits
For the years ended December 31
202520242023
Unrecognized tax benefits
$463 $551 $409 
Accrued interest on unrecognized tax benefits
65 81 72 
Portion that, if recognized, would reduce tax expense and effective tax rate
158 182 157 

Interest and penalties on unrecognized tax benefits recorded in Benefit (provision) for income taxes in the Consolidated Statements of Income were not material during the years ended December 31, 2025, 2024, and 2023.

DEFERRED INCOME TAXES.

We regularly evaluate the recoverability of our deferred tax assets and establish a valuation allowance, if necessary, to reduce the deferred tax assets to an amount that is more likely than not to be realized (a likelihood of more than 50%). Significant judgment is required in determining whether a valuation allowance is necessary and the amount of such valuation allowance. In assessing the recoverability of our deferred tax assets at December 31, 2025, we considered all available evidence, including the nature of financial statement losses, reversing taxable temporary differences, estimated future operating profits, and tax planning actions and strategies.

As of
December 31, 2025December 31, 2024
Total assets
$4,491 $4,474 
Total liabilities
(193)(56)
Net deferred income tax asset (liability)
$4,298 $4,418 
Components of the Net Deferred Income Tax Asset (Liability)As of
December 31, 2025December 31, 2024
Deferred tax assets:
Employee benefits
$1,247 $1,340 
Reserves and accruals481 413 
Operating loss carryforwards
463 447 
Lease liabilities
48 57 
Tax credit carryforwards
119 80 
U.S. interest restriction carryforwards135 156 
Goodwill and other intangible assets1,184 1,355 
Property, plant, and equipment
181 223 
Capitalized R&D
834 689 
Other deferred tax assets100 55 
Total deferred income tax asset
4,793 4,817 
Valuation allowances
(251)(231)
Total deferred income tax asset after valuation allowance
4,542 4,586 
Deferred tax liabilities:
ROU assets
(47)(42)
Other deferred tax liabilities
(198)(126)
Total deferred income tax liability
(244)(168)
Net deferred income tax asset (liability)
$4,298 $4,418 

Valuation allowances primarily relate to non-U.S. deferred taxes where there were historical losses and U.S. federal and state credit carryforwards. Activity in the valuation allowance consists of the following:

Valuation Allowances
For the years ended December 31
202520242023
Balance at beginning of period$231 $540 $272 
Provision for income taxes4 (279)(12)
Foreign currency exchange and other16 (31)280 
Balance at end of period $251 $231 $540 

For the year ended December 31, 2024, our valuation allowance decreased by $310 million, which included a release of a valuation allowance in France of $295 million reflected in the Provision for income taxes line. Based on our analysis of all positive and negative evidence during the year ended December 31, 2024, we concluded that it is more likely than not that France deferred tax assets will be realizable based on our profitability in France as a stand-alone company post Spin-Off and our expectation for the continued generation of prospective positive income in the jurisdiction. In making these judgments, we considered various business and structural factors as a stand-alone company, which support our conclusion of the realization of the deferred tax assets. As a result of the Spin-Off, there was an increase in the valuation allowance of $269 million in 2023, which is included in the Foreign currency exchange and other line of the table above.

NET OPERATING LOSSES.

As of December 31, 2025, the Company had net operating loss carryforwards of $5,987 million primarily related to Ireland, France, Brazil, Germany, and the Netherlands, which can be carried forward indefinitely. The gross net operating loss carryforwards resulted in a deferred tax asset of $1,170 million as of December 31, 2025. This amount excludes accruals of $300 million for unrecognized tax benefits the Company has recorded related to the underlying tax positions which generated the net operating losses and expected impacts to U.S. foreign tax credits of $407 million.

UNDISTRIBUTED EARNINGS.

Post Spin-Off, the Company’s previously undistributed earnings of certain of our foreign subsidiaries are no longer indefinitely reinvested in non-U.S. businesses due to current U.S. funding needs. Therefore, in 2023, an incremental deferred tax liability of $21 million was recorded for withholding and other foreign taxes due upon future distribution of earnings. In addition, the Company is providing for withholding and other foreign taxes due upon future distribution of current period earnings. However, the Company generally considers instances of outside basis differences in foreign subsidiaries that would incur additional U.S. tax upon an unforeseen future reversal (e.g., capital gain distribution or disposition to an unrelated third party) of approximately $8 billion to be permanent in duration. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.
CASH TAXES PAID.

The amounts of cash paid for income taxes by GE HealthCare are as follows.
For the year ended December 31, 2025
U.S. Federal$38 
U.S. State17 
Foreign
  Norway69 
  China66 
  India41 
  Japan23 
  United Kingdom23 
  Other151 
Cash paid during the year for income taxes$429