v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
13. Income Taxes

The Company’s income tax (provision) benefit totaled $(1,276) million, $(1,062) million and $923 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s effective income tax rate was approximately 19.1%, 14.3% and (16.5)% for the years ended December 31, 2025, 2024 and 2023, respectively.

The provision (benefit) for income taxes is presented in the following table:

 Years ended December 31,
(In millions)202520242023
Current
Federal income tax1
$474 $1,083 $809 
Foreign income tax2
86 23 104 
State and local income tax73 55 64 
$633 $1,161 $977 
Deferred
Federal income tax1
349 (77)331 
Foreign income tax2
274 (30)(2,239)
State and local income tax20 8 8 
643 (99)(1,900)
Total Income Tax Provision (Benefit)$1,276 $1,062 $(923)
1 For the years ended December 31, 2025, 2024 and 2023, income tax provision (benefit) includes proportional amortization of $513 million, $56 million and $49 million, respectively; tax credits of $(743) million, $(367) million and $(186) million, respectively; and transaction costs relating to low-income housing and transferable energy tax credits of $225 million, $248 million and $103 million, respectively.
2 The foreign income tax provision (benefit) was calculated on $7,656 million, $2,393 million and $2,600 million of pre-tax income (loss) generated in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023, respectively.
On July 4, 2025, the U.S. government enacted H.R. 1, which includes several tax-related provisions. The Company has evaluated the enacted legislation and concluded that it does not have a material impact on our consolidated financial statements.

In addition, the U.S. Department of the Treasury and the Internal Revenue Service have issued, and may continue to issue, regulatory guidance under the current administration related to previously enacted tax legislation, including interpretive guidance and notices related to CAMT. The Company has evaluated such guidance as issued to date and, based on its interpretations and assumptions, has reflected the impact of applicable guidance in its income tax provision. The guidance issued to date is not expected to have a material impact on the Company’s effective tax rate or consolidated financial statements. The Company will continue to monitor future guidance and rulemaking and will record any resulting impacts in the period such guidance is issued or becomes effective, as applicable.

The U.K. enacted legislation in July 2023 implementing certain provisions of the Organisation for Economic Cooperation and Development’s “Pillar Two” global minimum tax initiative that applies to multinational enterprises for accounting periods beginning on or after December 31, 2023. On February 22, 2024, the U.K. enacted certain amendments to its Pillar Two legislation which similarly took effect for accounting periods beginning on or after December 31, 2024. The Company continues to evaluate the potential impact on future periods of Pillar Two, pending legislative adoption by individual countries, as such legislative changes could result in changes to our effective tax rate. The Company evaluated the enacted legislation and concluded there was no material impact to our consolidated financial statements for the year ended December 31, 2025.

On December 27, 2023, the Government of Bermuda enacted the Bermuda CIT in response to the OECD’s Pillar Two initiative. Commencing on January 1, 2025, the Bermuda CIT generally imposed a 15% corporate income tax on in-scope entities that are resident in Bermuda or have a Bermuda permanent establishment, without regard to any assurances that were given pursuant to the Exempted Undertakings Tax Protection Act 1966. In connection with the enactment of the Bermuda CIT, the Company made interim elections to align the membership of the Company’s Bermuda CIT tax group with the membership of the Company’s Pillar Two Bermuda tax group, and recorded a deferred tax asset of $2.0 billion as of December 31, 2024 for entry into the Bermuda CIT regime. As of December 31, 2025, the Company had $1.7 billion of net Bermuda deferred tax assets and concluded that it was more likely than not that sufficient future taxable income would be generated to realize these deferred tax assets.

On January 5, 2026, the OECD issued guidance exempting U.S.-parented groups from the IIR or UTPR taxes under the Pillar Two regime. The U.K. government has publicly announced its intention to enact this guidance into law. While the precise timing of such enactment is subject to the U.K. government’s legislative process, once enacted, the Company expects that Athene and ACRA Bermuda entities would be exempt from the IIR and UTPR taxes in the U.K. In light of these developments, and the Company’s expectation that maintaining alignment between the Bermuda CIT and Pillar Two tax groups would no longer be beneficial, in January 2026, the Company revoked ACRA’s election to be subject to the Bermuda CIT.

Although the Company believes such an outcome would be unlikely, if the U.K. government does not enact the announced legislation, or subsequently amends its legislation in a manner that does not conform to the OECD guidance, the Company expects to re-elect ACRA into the Bermuda CIT regime at that time and utilize the Bermuda deferred tax assets to offset any resulting Bermuda CIT or Pillar Two cash tax obligations.

As a result of the foregoing, in the first quarter of 2026, the Company will record a full valuation allowance against its Bermuda deferred tax assets, as the Company no longer expects Athene or ACRA to incur Bermuda CIT or Pillar Two tax expense against which such deferred tax assets could be utilized. This will result in a reduction to other assets and a corresponding increase to the income tax provision equal to the net amount of the Bermuda deferred tax assets of $1.7 billion.

The primary jurisdictions in which the Company operates and incurs income taxes are the U.S., the U.K. and Bermuda. The Company has accumulated undistributed earnings generated by certain foreign subsidiaries, which are intended to be indefinitely reinvested. As such, no deferred taxes have been recorded related to the accumulated undistributed earnings. The Company determined that estimating the unrecognized tax liability is not practicable.
Beginning in 2025 annual reporting, the Company adopted ASU 2023-09 prospectively. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate for the year ended December 31, 2025 is as follows:

 Year ended December 31,
2025
(In millions, except percentages)AmountPercentage
U.S. federal statutory tax rate$1,401 21.0 %
State and local income taxes, net of federal income tax effect1
78 1.2 
State and local income taxes, net of federal income tax effect10 0.2 
Change in valuation allowance68 1.0 
Foreign tax effects(1,272)(19.1)
Bermuda
Statutory tax rate difference between Bermuda and U.S.(441)(6.6)
Income passed through to non-controlling interests(105)(1.6)
Anticipatory foreign tax credit(99)(1.5)
Bermuda foreign tax credit(664)(10.0)
Other foreign jurisdictions37 0.6 
Effect of cross-border tax laws1,062 15.9 
Subpart F income415 6.2 
U.S. tax on foreign insurance 953(d) income730 11.0 
Other(83)(1.3)
Tax credits(25)(0.4)
Changes in valuation allowances77 1.2 
Nontaxable or nondeductible items(58)(0.9)
Impact of equity-based compensation(70)(1.1)
Nondeductible executive compensation58 0.9 
Insurance company owned life insurance(32)(0.5)
Other nontaxable or nondeductible items(14)(0.2)
Changes in unrecognized tax benefits8 0.1 
Other adjustments5 0.1 
Investment tax credits accounted for under the proportional amortization method(40)(0.6)
Purchase of transferable credits(35)(0.5)
Other80 1.2 
Effective tax rate$1,276 19.1 %
1 State and local income taxes in California, Illinois, Iowa, New York State and New York City made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the U.S. federal statutory income tax rates to our effective tax rate for the years ended December 31, 2024 and 2023 is as follows:

 Years ended December 31,
 (In percentages) 20242023
U.S. federal statutory tax rate21.0 %21.0 %
Income passed through to non-controlling interests(3.5)(4.6)
State and local income taxes (net of federal benefit)0.5 1.2 
Impact of foreign taxes (net of foreign tax credit)(2.6)(31.0)
Impact of equity-based compensation(1.0)1.0 
Impact of valuation allowance0.6 (1.3)
Tax Credits(0.5)(0.6)
Redomicile0.1 (1.2)
Other(0.3)(1.0)
Effective income tax rate14.3 %(16.5)%
The income tax provision (benefit) is presented in the following table:

 Years ended December 31,
(In millions)202520242023
Income tax provision (benefit)$1,276 $1,062 $(923)
Income tax provision (benefit) from other comprehensive income (loss)835 21 513 
Total income tax provision (benefit)$2,111 $1,083 $(410)

The Company’s cash paid for taxes for the year ended December 31, 2025 included in the consolidated statements of cash flows consists of the following:

Year ended December 31,
(In millions)2025
Federal$458 
State and local76 
Foreign56 
Cash paid for taxes$590 
State and local
New York State and City$59 
Other State17 
Total State & local$76 
Foreign
U.K.$36 
Other foreign20 
Total Foreign$56 

Deferred income taxes are recorded due to temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.
The Company’s deferred tax assets and liabilities in the consolidated statements of financial condition consist of the following:

 December 31,
(In millions)20252024
Asset Management
Deferred Tax Assets
Depreciation and amortization$254 $303 
Tax credit carryforwards14 167 
Deferred revenue7 9 
Equity-based compensation274 166 
Net operating loss carryforwards40 23 
Other40 47 
Total Deferred Tax Assets629 715 
Valuation Allowance(54)(27)
Deferred Tax Assets, Net of Valuation Allowance575 688 
Deferred Tax Liabilities
Basis difference in investments317 252 
Other5 — 
Total Deferred Tax Liabilities322 252 
Total Deferred Tax Assets, Net – Asset Management$253 $436 
Retirement Services
Deferred Tax Assets
Insurance liabilities$3,117 $2,383 
Net operating loss and tax credit carryforwards382 206 
Investments, including derivatives749 2,331 
Employee benefits9 10 
Bermuda tax1,714 1,959 
Investment in foreign subsidiaries480 552 
Other19 — 
Total Deferred Tax Assets6,470 7,441 
Valuation Allowance(197)(48)
Deferred Tax Assets, Net of Valuation Allowance6,273 7,393 
Deferred Tax Liabilities
Intangible assets338 362 
DAC, DSI and VOBA1,322 1,120 
Other— 10 
Total Deferred Tax Liabilities1,660 1,492 
Total Deferred Tax Assets, Net – Retirement Services$4,613 $5,901 

The net operating loss and tax credit carryforwards consist of the following:

December 31, 2025
Amount
(in millions)
Expiration Year1
U.S. Federal net operating losses$711 2026
U.S. foreign tax credit49 2033
U.S. general business credits66 2045
U.S. corporate alternative minimum tax credits4 No expiration
U.S. State net operating losses284 2031
U.K. net operating losses286 No expiration
Bermuda net operating losses5,936 No expiration
1 Represents the year that operating losses and credits begin to expire.
The valuation allowance consists of the following:

 December 31,
(In millions)20252024
U.S. federal and state net operating losses and other deferred tax assets$180 $30 
U.K. net operating losses and other deferred tax assets71 45 
Total Valuation Allowance$251 $75 

Tax Contingencies

In the normal course of business, the Company is subject to examination by federal, state, local and foreign tax authorities. As of December 31, 2025, the Company’s U.S. federal, state, local and foreign income tax returns for the years 2022 through 2024 are open under the general statute of limitations provisions and therefore subject to examination. Currently, the Internal Revenue Service is examining the tax returns of the Company and certain subsidiaries for tax years 2019 to 2023. The State and City of New York are examining certain subsidiaries’ tax returns for tax years 2014 to 2023. The U.K. tax authorities are currently examining certain subsidiaries’ tax returns for tax years 2015 to 2022.

There are other routine examinations ongoing in other state, local, and foreign jurisdictions in which the Company operates. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. The Company continues to monitor the progress of ongoing discussions with tax authorities. No provisions with respect to these examinations have been recorded, other than the unrecognized tax benefits discussed below.

The following table presents a roll-forward of the beginning and ending aggregate unrecognized tax benefits for the periods presented:

Years ended December 31,
(In millions)202520242023
Balance at beginning of period$10 $19 $15 
Increases based on tax positions taken in the prior years5 8 4 
Decreases due to settlements with tax authorities(7)(17)— 
Balance at end of period$8 $10 $19 
The Company has unrecognized tax benefits of $10 million, $11 million and $23 million as of December 31, 2025, 2024 and 2023, respectively, which, if recognized, would impact the effective tax rate. The Company recognizes interest and penalties related to the unrecognized tax benefits in its provision for income taxes. The amount of interest accrued as of December 31, 2025, 2024 and 2023 were $2 million, $4 million and $10 million, respectively.