Amphastar Pharmaceuticals, Inc. Income Taxes Disclosure

Note 14. Income Taxes

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The Company’s income (loss) before income taxes generated from its operations were:

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The Company’s provision for income taxes consisted of the following:

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The lower federal current provision in 2025 reflects the impact of a tax deduction for certain previously deferred capitalized research and development expenditures under the One Big Beautiful Bill Act, or the OBBB Act.

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For the year ended December 31, 2025, the Company adopted ASU 2023-09 on a prospective basis.

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A reconciliation of the US federal statutory income tax rate of 21% to the Company’s effective tax rate after the adoption of ASU 2023-09 is as follows:

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* State taxes in California made up the majority (greater than 50%) of the tax effect in this category.

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A reconciliation of the US federal statutory income tax rate of 21% to the Company’s effective tax rate before the adoption of ASU 2023-09 is as follows:

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The Company’s effective tax rate for 2025 increased in comparison to 2024 primarily due to lower excess tax benefit from share-based compensation.

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Income Taxes Paid

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The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025:

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Deferred Tax Assets and Liabilities

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Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax credit carryforwards, and the tax effects of net operating loss carryforwards.

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The significant components of the Company’s deferred tax assets and liabilities are as follows:

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Tax Law Updates

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On July 4, 2025, the OBBB Act, was enacted into law. The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax

framework and the restoration of favorable tax treatment for certain business provisions. The OBBB Act did not result in any material adjustments to the Company’s total income tax provision for the year ended December 31, 2025 and the Company’s deferred tax balances were adjusted to reflect impacts of the OBBB Act enactment.

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Net Operating Loss Carryforwards and Tax Credits

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At December 31, 2025, the Company had no material U.S. federal or state net operating loss carryforwards, or NOL carryforwards. The Company had China, France and United Kingdom foreign NOL carryforwards of approximately $0.8 million, $91.9 million, and $2.9 million, respectively. The China NOL has a 5-year carryforward period and the France and United Kingdom NOLs have indefinite carryforward periods.

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At December 31, 2025, the Company had California research and development tax credit carryforwards of approximately $18.8 million. The California research and development tax credit has an indefinite carryforward period.

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Valuation Allowance

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In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. Ultimately, realization depends on the existence of future taxable income. Management considers sources of taxable income such as income in prior carryback periods, future reversal of existing deferred taxable temporary differences, tax-planning strategies, and projected future taxable income.

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The Company continues to record a full valuation allowance on the net deferred income tax assets of its French subsidiary, AFP, and its U.K. subsidiaries, AUK and IMS UK and will continue to do so until the subsidiaries generate sufficient taxable income to realize their respective deferred income tax assets. As of December 31, 2025 and 2024, the Company had a full valuation allowance against the net deferred tax assets of AFP, which totaled $22.4 million and $20.7 million, respectively, and a full valuation allowance against the net deferred tax assets of its UK subsidiaries of immaterial amounts.

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The Company also records a valuation allowance on net deferred income tax assets in states where it files separately and will continue to do so until sufficient taxable income is generated to realize these state deferred income tax assets.

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Uncertain Income Tax Positions

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

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Included in the balance of unrecognized tax benefits as of December 31, 2025 and 2024, was $13.2 million and $12.7 million, respectively that represents the portion that would impact the effective income tax rate if recognized.

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The Company recognizes interest and penalties related to unrecognized tax benefits in its income tax provision. For the years ended December 31, 2025, 2024, and 2023, the Company accrued interest of approximately $1.4 million, $1.3 million and $1.0 million, respectively, related to its uncertain tax positions.

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The Company and/or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various U.S. states and foreign jurisdictions. As of December 31, 2025, the Company is under U.S. federal examination for the

2022 tax year, California for the 2019-2021 tax years, and New York for the 2023 tax year. The Company does not have a tax examination in progress for Massachusetts, other states, or foreign jurisdictions. The Company is subject to income tax audit by tax authorities for tax years 2022 to 2024 for federal, 2019 to 2024 for states, and 2015 to 2024 for foreign.