AMERIPRISE FINANCIAL INCAMP
AMERIPRISE FINANCIAL INC Income Taxes Disclosure
Income Taxes
The components of income tax provision attributable to continuing operations were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Current income tax | |||||||||||||||||
| Federal | $ | 605 | $ | 583 | $ | 518 | |||||||||||
| State and local | 154 | 137 | 124 | ||||||||||||||
| Foreign | 25 | 21 | 18 | ||||||||||||||
| Total current income tax | 784 | 741 | 660 | ||||||||||||||
| Deferred income tax | |||||||||||||||||
| Federal | 157 | 164 | 45 | ||||||||||||||
| State and local | (2) | (29) | (14) | ||||||||||||||
| Foreign | 2 | (10) | (13) | ||||||||||||||
| Total deferred income tax | 157 | 125 | 18 | ||||||||||||||
| Total income tax provision | $ | 941 | $ | 866 | $ | 678 | |||||||||||
The geographic sources of pretax income from continuing operations were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| United States | $ | 4,406 | $ | 4,221 | $ | 3,199 | |||||||||||
| Foreign | 98 | 46 | 35 | ||||||||||||||
| Total | $ | 4,504 | $ | 4,267 | $ | 3,234 | |||||||||||
The principal reasons that the aggregate income tax provision attributable to continuing operations is different from that computed by using the U.S. statutory rate of 21% were as follows:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||||||||||||||||||||||
(in millions, except percentages) | |||||||||||||||||||||||||||||||||||
U.S. federal statutory tax rate | $ | 946 | 21.0% | $ | 896 | 21.0% | $ | 679 | 21.0% | ||||||||||||||||||||||||||
State and local income taxes, net of federal income tax effect (1) | 103 | 2.3 | 85 | 2.0 | 87 | 2.7 | |||||||||||||||||||||||||||||
| Foreign tax effects | 6 | 0.1 | 1 | — | (2) | (0.1) | |||||||||||||||||||||||||||||
Effect of cross-border tax laws | 2 | — | 1 | — | — | — | |||||||||||||||||||||||||||||
| Tax credits | (46) | (1.0) | (47) | (1.1) | (61) | (1.9) | |||||||||||||||||||||||||||||
Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
| Incentive compensation | (61) | (1.4) | (66) | (1.6) | (47) | (1.5) | |||||||||||||||||||||||||||||
| Other | (12) | (0.2) | (12) | (0.3) | 3 | 0.1 | |||||||||||||||||||||||||||||
Changes in unrecognized tax benefits | 13 | 0.3 | 19 | 0.5 | 26 | 0.8 | |||||||||||||||||||||||||||||
Other adjustments | (10) | (0.2) | (11) | (0.2) | (7) | (0.1) | |||||||||||||||||||||||||||||
Effective tax rate | $941 | 20.9% | $866 | 20.3% | $678 | 21.0% | |||||||||||||||||||||||||||||
(1) State taxes in California, Minnesota, New York, Massachusetts and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category for 2025. State taxes in Minnesota, California, New York, Georgia, and Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category for 2024. State taxes in California, Minnesota, New York and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category for 2023.
Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for GAAP reporting versus income tax return purposes. Deferred income tax assets and liabilities are measured at the statutory rate of 21% as of both December 31, 2025 and 2024. The significant components of the Company’s deferred income tax assets and liabilities, which are included net within Other assets or Other liabilities, were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Deferred income tax assets | |||||||||||
Deferred compensation including corresponding hedges | $ | 715 | $ | 655 | |||||||
Insurance and annuity benefits including corresponding hedges | 525 | 802 | |||||||||
Investments including net unrealized on Available-for-Sale securities | 195 | 381 | |||||||||
Net operating loss and tax credit carryforward | 159 | 221 | |||||||||
| Other | 200 | 159 | |||||||||
| Gross deferred income tax assets | 1,794 | 2,218 | |||||||||
| Less: valuation allowance | 65 | 67 | |||||||||
| Total deferred income tax assets | 1,729 | 2,151 | |||||||||
| Deferred income tax liabilities | |||||||||||
| Deferred acquisition costs | 333 | 364 | |||||||||
Goodwill and intangibles | 323 | 323 | |||||||||
| Other | 153 | 137 | |||||||||
| Gross deferred income tax liabilities | 809 | 824 | |||||||||
| Net deferred income tax assets | $ | 920 | $ | 1,327 | |||||||
Included in the Company’s deferred income tax assets are tax benefits related to foreign net operating losses of $50 million, which do not expire, corporate alternative minimum tax (“CAMT”) credit carryforwards of $75 million, which do not expire, and state net operating losses of $34 million, net of federal benefit, which will expire beginning December 31, 2026. Based on analysis of the Company’s tax position as of December 31, 2025, management believes it is more likely than not that the Company will not realize certain state net operating losses of $29 million, state deferred tax assets of $2 million (both net of federal benefit), and foreign net operating losses of $34 million; therefore, a valuation allowance of $65 million has been established.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Balance at January 1 | $ | 164 | $ | 150 | $ | 138 | |||||||||||
Additions for tax positions related to the current year | 19 | 22 | 26 | ||||||||||||||
Reductions for tax positions related to the current year | (2) | (2) | (3) | ||||||||||||||
| Additions for tax positions of prior years | 15 | 23 | 80 | ||||||||||||||
| Reductions for tax positions of prior years | (20) | (8) | (85) | ||||||||||||||
Reductions due to lapse of statutes of limitations | (5) | (20) | (5) | ||||||||||||||
| Audit settlements | (3) | (1) | (1) | ||||||||||||||
| Balance at December 31 | $ | 168 | $ | 164 | $ | 150 | |||||||||||
If recognized, approximately $137 million, $134 million and $120 million, net of federal tax benefits, of unrecognized tax benefits as of December 31, 2025, 2024 and 2023, respectively, would affect the effective tax rate.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized a net increase of $16 million, $5 million and $12 million in interest and penalties for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, the Company had a payable of $55 million and $31 million, respectively, related to accrued interest and penalties.
The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The federal statutes of limitations are closed on years through 2018, except for two issues for 2016 which were claimed on an amended return. During the second quarter of 2025, the Internal Revenue Service (“IRS”) finalized the audit of tax years 2019 and 2020, except for one issue for 2020, which remains open. The IRS is currently auditing the Company’s U.S. income tax returns for 2021 through 2023. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2018 through 2023.
The Company is an applicable corporation required to compute CAMT, however, as of December 31, 2025, based on current estimates, the Company does not expect to be liable for CAMT in 2025. This estimate is based on interpretations and assumptions of available guidance, including proposed regulations and notices, that the Company has made regarding the CAMT provisions of the Inflation Reduction Act of 2022.
In December 2021, the Organization for Economic Co-operation and Development published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises pay a minimum level of tax on profits from each jurisdiction in which they operate. As of December 31, 2025, the tax impact was not material to the consolidated financial statements. The Company continues to monitor the adoption and implementation of these rules and evaluate the potential impact on its consolidated financial statements.
The legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. The corporate tax law changes resulting from the OBBBA did not have a material impact to the Company’s consolidated financial statements for the year ended December 31, 2025 and, based on current guidance, the Company does not expect to record any material impacts in the future.
Income taxes paid were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Income taxes paid, net | $ | 885 | $ | 496 | $ | 1,036 | |||||||||||
| Federal | 716 | 366 | 885 | ||||||||||||||
State and local | 146 | 117 | 129 | ||||||||||||||
| Foreign | 23 | 13 | 22 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 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.