JPMORGAN CHASE & COJPM
JPMORGAN CHASE & CO Income Taxes Disclosure
Income taxes
JPMorganChase and its eligible subsidiaries file a consolidated U.S. federal income tax return. JPMorganChase uses the asset and liability method to provide for income taxes on all transactions recorded in the Consolidated Financial Statements. This method requires that income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets or liabilities for book and tax purposes. Accordingly, a deferred tax asset or liability for each temporary difference is determined based on the tax rates that the Firm expects to be in effect when the underlying items of income and expense are realized. JPMorganChase’s expense for income taxes includes the current and deferred portions of that expense. A valuation allowance is established to reduce deferred tax assets to the amount the Firm expects to realize.
Due to the inherent complexities arising from the nature of the Firm’s businesses, and from conducting business and being taxed in a substantial number of
jurisdictions, significant judgments and estimates are required to be made. Agreement of tax liabilities between JPMorganChase and the many tax jurisdictions in which the Firm files tax returns may not be finalized for several years. Thus, the Firm’s final tax-related assets and liabilities may ultimately be different from those currently reported.
For the year ended December 31, 2025, the Firm adopted the Income Taxes: Improvement to Income Tax Disclosures accounting standard, under the retrospective method. The adoption of this guidance resulted in expanded disclosures in certain tables below.
Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 6 and 14 for additional information.
Effective tax rate and expense
The following table presents a reconciliation of the applicable statutory U.S. federal income tax rate to the effective tax rate.
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
Year ended December 31, (in millions, except rates) | Income tax expense | % of income before income tax expense | Income tax expense | % of income before income tax expense | Income tax expense | % of income before income tax expense | ||||||||||||||||||||||||||
| Statutory U.S. federal tax rate | $ | 15,245 | 21.0 | % | $ | 15,767 | 21.0 | % | $ | 12,938 | 21.0 | % | ||||||||||||||||||||
| Increase/(decrease) in tax rate resulting from: | ||||||||||||||||||||||||||||||||
U.S. state and local income taxes, net of U.S. federal income tax benefit(a) | 2,688 | 3.7 | 2,373 | 3.2 | 1,729 | 2.8 | ||||||||||||||||||||||||||
| Foreign tax effects | 1,386 | 1.9 | 1,670 | 2.2 | 1,411 | 2.3 | ||||||||||||||||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | (134) | (0.2) | — | — | — | — | ||||||||||||||||||||||||||
| Effect of cross border tax laws, net | (342) | (0.5) | (509) | (0.7) | (325) | (0.5) | ||||||||||||||||||||||||||
| Tax credits, net | (2,144) | (3.0) | (1,985) | (2.6) | (2,802) | (4.5) | ||||||||||||||||||||||||||
Alternative energy credits | (1,135) | (1.6) | (1,125) | (1.5) | (2,170) | (3.5) | ||||||||||||||||||||||||||
All other | (1,009) | (1.4) | (860) | (1.1) | (632) | (1.0) | ||||||||||||||||||||||||||
| Change in valuation allowances | 248 | 0.3 | — | — | — | — | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | (246) | (0.3) | (369) | (0.5) | 29 | — | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (387) | (0.5) | (3) | — | 56 | 0.1 | ||||||||||||||||||||||||||
| Other, net | (767) | (1.0) | (334) | (0.5) | (976) | (1.6) | ||||||||||||||||||||||||||
| Total income tax expense and effective tax rate | $ | 15,547 | 21.4 | % | $ | 16,610 | 22.1 | % | $ | 12,060 | (b) | 19.6 | % | (b) | ||||||||||||||||||
(a)For the years ended December 31, 2025 and 2024, California, New York City, and New York State made up greater than 50% of the effect of the U.S. state and local income taxes category. For the year ended December 31, 2023, New York City and California made up greater than 50% of the effect of the U.S. state and local income taxes category.
(b)Income tax expense associated with the First Republic acquisition was reflected in the estimated bargain purchase gain, which resulted in a reduction in the Firm’s effective tax rate.
The following table reflects the components of income tax expense/(benefit) included in the Consolidated statements of income.
| Income tax expense/(benefit) | |||||||||||
| Year ended December 31, (in millions) | 2025 | 2024 | 2023 | ||||||||
| Current income tax expense/(benefit) | |||||||||||
| U.S. federal | $ | 3,109 | $ | 7,091 | $ | 8,973 | |||||
| U.S. state and local | 2,559 | 2,762 | 3,266 | ||||||||
| Non-U.S. | 4,268 | 4,753 | 4,355 | ||||||||
Total current income tax expense | 9,936 | 14,606 | 16,594 | ||||||||
| Deferred income tax expense/(benefit) | |||||||||||
| U.S. federal | 4,447 | 1,771 | (3,475) | ||||||||
| U.S. state and local | 906 | 161 | (1,094) | ||||||||
| Non-U.S. | 258 | 72 | 35 | ||||||||
| Total deferred income tax expense/(benefit) | 5,611 | 2,004 | (4,534) | ||||||||
| Total income tax expense | $ | 15,547 | $ | 16,610 | $ | 12,060 | |||||
Total income tax expense includes $629 million, $314 million and $68 million of tax benefits for the years ended December 31, 2025, 2024 and 2023, respectively, resulting from the resolution of tax audits.
Tax effect of items recorded in stockholders’ equity
The preceding table does not reflect the tax effect of certain items that are recorded each period directly in stockholders’ equity, which are predominantly reflected in OCI as disclosed in Note 24. For the year ended December 31, 2024, stockholders’ equity reflected the tax effect associated with the Firm’s adoption of the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance. For the year ended December 31, 2023, stockholders’ equity reflected the tax effect associated with the Firm’s adoption of the TDR accounting guidance. Both of the respective adoptions were recognized in retained earnings. Refer to Note 1, 6 and 14 for further information.
Results from U.S. and non-U.S. earnings
The following table presents the U.S. and non-U.S. components of income before income tax expense.
| Year ended December 31, (in millions) | 2025 | 2024 | 2023 | ||||||||
| U.S. | $ | 56,184 | $ | 59,472 | $ | 46,868 | |||||
Non-U.S.(a) | 16,411 | 15,609 | 14,744 | ||||||||
Income before income tax expense | $ | 72,595 | $ | 75,081 | $ | 61,612 | |||||
(a)For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.
The Firm will recognize any U.S. income tax expense it may incur on global intangible low tax income as income tax expense in the period in which the tax is incurred.
Income taxes paid
Cash paid for income taxes, net of refunds, was $5.3 billion, $11.7 billion, and $9.9 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table presents income taxes paid by respective jurisdiction in excess of 5% of total income taxes paid, net of refunds received.
| Year ended December 31, (in millions) | 2025 | 2024 | 2023 | ||||||||
| U.S. federal | $ | (1,099) | $ | 3,465 | $ | 2,797 | |||||
| U.S. state and local | |||||||||||
New York State | 538 | NM | 590 | ||||||||
California | 465 | 810 | 721 | ||||||||
New York City | 270 | NM | NM | ||||||||
All other | 459 | 2,065 | 1,432 | ||||||||
Total U.S. state and local | 1,732 | 2,875 | 2,743 | ||||||||
Non-U.S. | |||||||||||
United Kingdom | 987 | 1,254 | 1,254 | ||||||||
India | 582 | 599 | NM | ||||||||
France | 459 | NM | NM | ||||||||
Luxembourg | 272 | NM | NM | ||||||||
Germany | NM | 647 | NM | ||||||||
All other | 2,376 | 2,875 | 3,114 | ||||||||
Total Non-U.S. | 4,676 | 5,375 | 4,368 | ||||||||
Total cash income taxes paid, net | $ | 5,309 | $ | 11,715 | $ | 9,908 | |||||
NM refers to not meaningful, which reflects the amount of income taxes paid during the year that does not meet the 5% disaggregation threshold.
Deferred taxes
Deferred income tax expense/(benefit) reflects the differences between assets and liabilities measured for financial reporting purposes versus income tax return purposes. Deferred tax assets are recognized if, in management’s judgment, their realizability is determined to be more likely than not. If a deferred tax asset is determined to be unrealizable, a valuation allowance is established. The significant components of deferred tax assets and liabilities are reflected in the following table, the net deferred tax assets are reflected in other assets on the Firm’s Consolidated balance sheets.
December 31, (in millions) | 2025 | 2024 | ||||||
| Deferred tax assets | ||||||||
| Allowance for loan losses | $ | 7,402 | $ | 6,117 | ||||
| Employee benefits | 1,079 | 1,165 | ||||||
Accrued expenses and other | 5,907 | 8,881 | ||||||
| Depreciation and amortization | — | 386 | ||||||
| Non-U.S. operations | 1,027 | 948 | ||||||
| Tax attribute carryforwards | 2,252 | 352 | ||||||
| Gross deferred tax assets | 17,667 | 17,849 | ||||||
| Valuation allowance | (476) | (249) | ||||||
Deferred tax assets, net of valuation allowance | $ | 17,191 | $ | 17,600 | ||||
| Deferred tax liabilities | ||||||||
| Depreciation and amortization | $ | 2,343 | $ | — | ||||
Mortgage servicing rights, net of hedges | 1,950 | 1,912 | ||||||
| Leasing transactions | 4,291 | 2,249 | ||||||
| Other, net | 1,659 | 1,264 | ||||||
| Gross deferred tax liabilities | 10,243 | 5,425 | ||||||
Net deferred tax assets | $ | 6,948 | $ | 12,175 | ||||
JPMorganChase has recorded deferred tax assets of $2.3 billion at December 31, 2025 in connection with tax attribute carryforwards. GBC and FTC carryforwards were $1.7 billion and $257 million, respectively. State and local capital loss carryforwards were $1.2 billion, non-U.S. NOL carryforwards were $1.0 billion, U.S. federal NOL carryforwards were $193 million, and other U.S. federal tax attributes were $61 million. If not utilized, a portion of the U.S. federal NOL carryforwards and other U.S. federal tax attributes will expire between 2026 and 2036 whereas others have an unlimited carryforward period. Similarly, certain non-U.S. NOL carryforwards will expire between 2028 and 2042 whereas others have an unlimited carryforward period. The state and local capital loss carryforwards will expire between 2026 and 2029. GBC carryforwards will expire in 2045 and FTC carryforwards will expire between 2030 and 2035.
The valuation allowance at December 31, 2025 was predominantly driven by deferred tax assets associated with FTCs and non-U.S. NOLs.
Unrecognized tax benefits
At December 31, 2025, 2024 and 2023, JPMorganChase’s unrecognized tax benefits, excluding related interest expense and penalties, were $5.6 billion, $6.2 billion and $5.4 billion, respectively, of which $4.6 billion, $4.4 billion and $3.9 billion, respectively, if recognized, would reduce the annual effective tax rate. Included in the amount of unrecognized tax benefits are certain items that would not affect the effective tax rate if they were recognized in the Consolidated statements of income. These unrecognized items include the tax effect of certain temporary differences, the portion of gross state and local unrecognized tax benefits that would be offset by the benefit from associated U.S. federal income tax deductions, and the portion of gross non-U.S. unrecognized tax benefits that would have offsets in other jurisdictions. JPMorganChase evaluates the need for changes in unrecognized tax benefits based on its anticipated tax return filing positions as part of its U.S. federal, state and local, and non-U.S. tax returns. In addition, the Firm is presently under audit by a number of taxing authorities, most notably by the Internal Revenue Service, as summarized in the Tax examination status table below. The change in the unrecognized tax benefit would result in a payment or income statement recognition.
The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits.
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at January 1, | $ | 6,159 | $ | 5,401 | $ | 5,043 | |||||||||||
Increases based on tax positions related to the current period | 609 | 1,721 | 1,440 | ||||||||||||||
Increases based on tax positions related to prior periods | 128 | 92 | 37 | ||||||||||||||
Decreases based on tax positions related to prior periods | (1,268) | (907) | (1,110) | ||||||||||||||
Decreases related to cash settlements with taxing authorities | (4) | (148) | (9) | ||||||||||||||
| Balance at December 31, | $ | 5,624 | $ | 6,159 | $ | 5,401 | |||||||||||
After-tax interest expense/(benefit) and penalties related to income tax liabilities recognized in income tax expense were $241 million, $288 million and $229 million for the years ended December 31, 2025, 2024 and 2023, respectively.
At December 31, 2025 and 2024, in addition to the liability for unrecognized tax benefits, the Firm had accrued $1.9 billion and $1.7 billion, respectively, for income tax-related interest and penalties.Tax examination status
JPMorganChase is continually under examination by the Internal Revenue Service, by taxing authorities throughout the world, and by many state and local jurisdictions throughout the U.S. The following table summarizes the status of tax years that remain subject to income tax examination of JPMorganChase and its consolidated subsidiaries by significant jurisdictions as of December 31, 2025.
| Periods under examination | Status | |||||||
| JPMorganChase – U.S. | 2011 – 2013 | Field examination of amended returns; certain matters at Appellate level | ||||||
| JPMorganChase – U.S. | 2014 - 2020 | Field examination of original and amended returns; certain matters at Appellate level | ||||||
| JPMorganChase – New York City | 2015 - 2018 | Field examination | ||||||
JPMorganChase – New York State | 2015 - 2018 | Field examination | ||||||
| JPMorganChase – U.K. | 2017 – 2023 | Field examination of certain select entities | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 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.