ALUMIS INC. Income Taxes Disclosure
15.Income Taxes
Net loss before provision for income taxes distributed geographically was as follows for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Domestic | $ | (251,886) | $ | (294,233) | ||
Foreign | — | — | ||||
Total | $ | (251,886) | $ | (294,233) | ||
The provision for income taxes was as follows for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Current | ||||||
Federal | $ | — | $ | — | ||
State and local | — | — | ||||
Foreign | — | — | ||||
Total Current | $ | — | $ | — | ||
Deferred | ||||||
Federal | $ | (8,561) | $ | — | ||
State and local | — | — | ||||
Foreign | — | — | ||||
Total Deferred | $ | (8,561) | $ | — | ||
Total income tax provision (benefit) | $ | (8,561) | $ | — | ||
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to net loss before income taxes after the adoption of ASU 2023-09 is as follows (in thousands):
| Year Ended December 31, 2025 | |||||
$ | % | |||||
Net loss before income taxes | $ | (251,886) | ||||
U.S. federal statutory tax rate | (52,896) | 21.0 | % | |||
State and local income taxes, net of federal effect(1) | (3) | % | ||||
Tax credits | ||||||
Research and development credits | 11,129 | (4.4) | % | |||
Changes in valuation allowance |
| 64,966 | (25.8) | % | ||
Nontaxable or nondeductible items |
| |||||
Nondeductible officer's compensation | 593 | (0.2) | % | |||
Gain on bargain purchase | (39,461) | 15.7 | % | |||
Stock-based compensation |
| 4,621 | (1.9) | % | ||
Transaction costs | 2,346 | (0.9) | % | |||
Other | 144 | (0.1) | % | |||
$ | (8,561) | 3.4 | % | |||
| (1) | The state and local tax effect in this category is not material to the consolidated financial statements. |
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to net loss before income taxes for the year ended December 31 2024, prior to the adoption of ASU 2023-09, is as follows (in thousands):
| Year Ended December 31, | ||
2024 | |||
Amount at statutory tax rates | $ | (61,789) | |
Permanent differences |
| 3,000 | |
Valuation allowance |
| 64,923 | |
Stock-based compensation |
| 3,356 | |
Federal research and development credit |
| (9,520) | |
Other |
| 30 | |
Total | $ | — | |
The Company recognized a benefit from income taxes of $8.6 million for the year ended December 31, 2025. The income tax benefit is primarily related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger. No provision for income taxes was recorded for the year ended December 31, 2024, as the Company operated with taxable losses. The Company has only incurred net operating losses in the United States since inception.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, including, but not limited to, modifications of capitalization of research and development expenses and accelerated fixed asset depreciation. The adoption of the OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025.
Significant components of the deferred tax assets (liabilities) balances as of December 31, 2025 and 2024 were as follows (in thousands):
| December 31, | | December 31, | |||
2025 | 2024 | |||||
Deferred tax assets: | ||||||
Net operating losses | $ | 59,420 | $ | 21,573 | ||
Tax credits |
| 8,025 |
| 17,407 | ||
Research and development capitalization |
| 191,356 |
| 74,211 | ||
Fixed assets and intangibles | 6,898 | — | ||||
Accruals and reserves |
| 2,002 |
| 115 | ||
Stock-based compensation |
| 7,559 |
| 3,088 | ||
Operating lease liabilities |
| 7,754 |
| 6,452 | ||
Other capitalized expenses |
| 14,160 |
| 11,832 | ||
Gross deferred tax assets |
| 297,174 |
| 134,678 | ||
Valuation allowance |
| (292,978) |
| (127,990) | ||
Deferred tax assets, net of valuation allowance | $ | 4,196 | $ | 6,688 | ||
Deferred tax liabilities: | ||||||
Fixed assets and intangibles | $ | — | $ | (885) | ||
Operating lease right-of-use assets |
| (6,336) |
| (5,803) | ||
Deferred tax liabilities |
| (6,336) |
| (6,688) | ||
Total net deferred tax assets | $ | (2,140) | $ | — | ||
A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. The Company believes that, based on a number of factors such as the history of operating losses, it is more likely than not that the deferred tax assets will not be fully realized, such that a valuation allowance has been recorded. The valuation allowance increased by $165.0 million and by $66.6 million for the years ended December 31, 2025 and 2024, respectively, primarily due to capitalized research and development expenditures and net operating losses carryforwards.
The following table presents the Company’s U.S. federal and state net operating loss carryforwards and tax credits as of December 31, 2025 (in thousands):
| Amount | | Begin to Expire | ||
Net operating losses, U.S. federal | $ | 264,643 |
| Do not expire | |
Net operating losses, U.S. federal | $ | 16,520 |
| 2037 | |
Net operating losses, U.S. states | $ | 5,866 |
| 2041 | |
Tax credits, U.S. federal | $ | 3,493 |
| 2045 | |
Tax credits, U.S. states | $ | 8,238 |
| 2037 | |
Utilization of some of the U.S. federal and state net operating loss and credit carryforwards may be subject to annual limitations due to the change in ownership provisions of the Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. As of December 31, 2025, the Company has completed an Internal Revenue Code Section 382 analysis which resulted in the expiration of U.S. federal net credits before utilization and, as such, has recognized a reduction of deferred tax assets. As the Company has recognized a valuation allowance, any potential limitation is not expected to have a material impact to the consolidated financial statements.
Uncertain Tax Positions
A reconciliation of the beginning and ending balances of the unrecognized tax benefits for the years ended December 31, 2025 and 2024, is as follows (in thousands):
| Year Ended December 31, | |||||
2025 | 2024 | |||||
Beginning balance | $ | 2,797 | $ | 4,116 | ||
Increases in tax positions in the current period |
| 1,164 |
| 1,336 | ||
Decreases related to prior year’s tax position |
| (1,985) |
| (2,655) | ||
Ending balance | $ | 1,976 | $ | 2,797 | ||
The entire amount of the unrecognized tax benefits would not impact the Company’s effective tax rate if recognized. The Company has elected to include interest and penalties as a component of other income (expense), net. For the years ended December 31, 2025 and 2024, the Company did not recognize any accrued interest and penalties related to unrecognized tax benefits.
As of December 31, 2025, the Company is not under audit by the Internal Revenue Service or any state authority for income taxes for any open years. Due to the Company’s net operating loss carryforwards, the Company’s domestic income tax returns are open to examination by the Internal Revenue Service beginning with tax year 2017 and by state taxing authorities beginning with tax year 2021.
Income Taxes Paid Disclosure (under ASU 2023-09)
The amounts of cash income taxes paid by the Company for the years ended December 31, 2025 and 2024 were immaterial.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 19, 2025 | |
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.