ALLIANCEBERNSTEIN HOLDING L.P.AB
ALLIANCEBERNSTEIN HOLDING L.P. Income Taxes Disclosure
Income Taxes
AB Holding is a publicly-traded partnership ("PTP") for federal tax purposes and, accordingly, is not subject to federal or state corporate income taxes. However, AB Holding is subject to the 4.0% New York City Unincorporated Business Tax (“UBT”), net of credits for UBT paid by AB, and to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business. AB Holding’s partnership gross income is derived from its interest in AB.
The table below provides the updated requirements of the Improvements to Income Tax Disclosures effective January 1, 2025. See Note 2 Summary of Significant Accounting Policies—Recent Accounting Pronouncements for additional details on the adoption of the Improvements to Income Tax Disclosures.
The Improvements to Income Tax Disclosures require reconciliation to the applicable statutory federal (national) income tax rate of the jurisdiction of domicile. Beginning 2025, the Company updated the rate reconciliation to start with a zero percent federal income tax rate. The rate reconciliation discloses material reconciling items and foreign jurisdictions based on significant transactions, events, or jurisdictions separately disclosed elsewhere in the financial statements.
The principal reasons for the difference between our effective tax rates and the statutory federal income tax rate are as follows:
| Year Ended December 31, | ||||||||||||||
| 2025 | ||||||||||||||
| (in thousands) | ||||||||||||||
| $ | — | — | % | |||||||||||
| State and local income tax1 | — | — | ||||||||||||
| Other adjustments | ||||||||||||||
| Partnership gross income tax (federal and state) | 32,920 | 9.9 | % | |||||||||||
| Income tax expense and effective tax rate | $ | 32,920 | 9.9 | % | ||||||||||
For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the principal reasons for the difference between our effective tax rates and the UBT statutory tax rate of 4.0% are as follows:
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| UBT statutory rate | $ | 18,478 | 4.0 | % | $ | 11,991 | 4.0 | % | ||||||||||||||||||
| Federal tax on partnership gross business income | 37,622 | 8.1 | 34,765 | 11.6 | ||||||||||||||||||||||
| State income taxes | 953 | 0.3 | 832 | 0.3 | ||||||||||||||||||||||
| Credit for UBT paid by AB | (18,478) | (4.0) | (11,991) | (4.0) | ||||||||||||||||||||||
| Income tax expense and effective tax rate | $ | 38,575 | 8.4 | % | $ | 35,597 | 11.9 | % | ||||||||||||||||||
AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. Certain AB qualifying revenues are primarily U.S. investment advisory fees. AB Holding Units in AB’s consolidated rabbi trust are not considered outstanding for purposes of calculating AB Holding’s ownership interest in AB.
| Years Ended December 31, | % Change | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025-24 | 2024-23 | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Net income attributable to AB Unitholders | $ | 982,489 | $ | 1,173,247 | $ | 764,610 | (16.3 | %) | 53.4 | % | |||||||||||||||||||
| Multiplied by: weighted average equity ownership interest | 33.9 | % | 39.4 | % | 39.2 | % | |||||||||||||||||||||||
| Equity in net income attributable to AB Unitholders | $ | 332,756 | $ | 461,949 | $ | 299,781 | (28.0 | %) | 54.1 | % | |||||||||||||||||||
| AB qualifying revenues | $ | 2,950,386 | $ | 2,964,983 | $ | 2,790,628 | (0.5) | 6.2 | |||||||||||||||||||||
| Multiplied by: weighted average equity ownership interest for calculating tax | 31.0 | % | 36.3 | % | 35.6 | % | |||||||||||||||||||||||
| Multiplied by: federal tax | 3.5 | % | 3.5 | % | 3.5 | % | |||||||||||||||||||||||
| Federal income taxes | 32,030 | 37,622 | 34,765 | ||||||||||||||||||||||||||
| State income taxes | 890 | 953 | 832 | ||||||||||||||||||||||||||
| Total income taxes | $ | 32,920 | $ | 38,575 | $ | 35,597 | (14.7 | %) | 8.4 | % | |||||||||||||||||||
In order to preserve AB Holding’s status as a PTP for federal income tax purposes, management ensures that AB Holding does not directly or indirectly (through AB) enter into a substantial new line of business. If AB Holding were to lose or surrender its status as a PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.
We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all relevant information. Accordingly, we have no liability for unrecognized tax benefits as of December 31, 2025 and 2024. A liability for unrecognized tax benefits, if required, would be recorded in income tax expense and affect the company’s effective tax rate. As of December 31, 2025, AB Holding is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2021.
Upon adoption of the amendments under Improvements to Income Tax Disclosures applied for the year ended December 31, 2025, cash paid (net of refunds received) for income taxes consisted of the following:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Federal tax on partnership gross business income | $ | 33,038 | $ | — | $ | — | |||||||||||
| State & local | 988 | — | — | ||||||||||||||
| Total cash paid for income taxes (net of refunds) | 34,026 | — | — | ||||||||||||||
| Total cash paid for income taxes (prior to ASU 2023-09) | $ | — | $ | 37,102 | $ | 35,928 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 9, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 12, 2020 | |
| 2018 | Feb 13, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 14, 2017 | |
| 2015 | Feb 11, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.