American National Group Inc.ANG-PD

American National Group Inc. Income Taxes Disclosure

10-KFiled Mar 31, 20266 min read
21. Income Taxes
Income taxes are recognized for the amount of taxes payable by our subsidiaries and for the impact of deferred income tax assets and liabilities related to such subsidiaries.
The following presents the income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign jurisdictions:
Year Ended December 31,
202520242023
(Dollars in millions)
U.S. Federal (1)
$(565)$(127)$262 
Foreign (Bermuda)959 497 190 
Total$394 $370 $452 
(1)In prior years, income (loss) from our Bermuda-domiciled subsidiary that has elected to pay U.S. income taxes under section 953(d) of the Internal Revenue code was not separately reported. Following the adoption of Accounting Standards Update 2023-09, this income is now reflected as foreign income with prior period amounts conformed accordingly.
Our income tax expense is as follows:
Year Ended December 31,
202520242023
(Dollars in millions)
Consolidated Statements of Operations:
Current tax expense (benefit):
U.S. Federal$(66)$65 $(6)
U.S. State1 — — 
Foreign (Bermuda)(44)— — 
Total current tax expense (benefit)(109)65 (6)
Deferred tax expense (benefit):
U.S. Federal170 28 84 
U.S. State— — — 
Foreign (Bermuda)(81)(292)(35)
Total deferred tax expense (benefit)89 (264)49 
Total income tax expense (benefit) from continuing operations$(20)$(199)$43 
Following is a summary of income taxes paid by jurisdiction:
Year Ended December 31,
202520242023
(Dollars in millions)
U.S Federal $(21)$346 $40 
U.S. State4 43 7 
Foreign— — — 
Total$(17)$389 $47 
Income tax expense (recovery) differed from the amount computed at the statutory federal income tax rate of 21% as follows:
202520242023
AmountPercentAmountPercentAmountPercent
(Dollars in millions)
U.S. federal statutory tax rate$83 21.0 %$78 21.0 %$95 21.0 %
U.S. state and local income tax, net of federal income tax effect1 0.3 %2 0.5 %— — %
Foreign tax effects:
Bermuda:
Statutory tax rate difference between the U.S. and Bermuda(58)(14.7)%(104)(28.1)%(40)(8.8)%
Effect of changes in tax laws or rates enacted in the current period(125)(31.7)%(292)(78.9)%(35)(7.7)%
Foreign tax credits(144)(36.5)%— — — — 
Effect of cross border tax laws186 47.2 %119 32.2 %40 8.8 %
Tax credits, net(2)(0.5)%(3)(0.8)%(12)(2.7)%
Changes in valuation allowances19 4.8 %— — %2 0.4 %
Nontaxable or nondeductible items7 1.8 %9 2.4 %2 0.4 %
Changes in unrecognized tax benefits.— — %— — %— — %
Other, net13 3.3 %(8)(2.2)%(9)(2.0)%
Total income tax expense (benefit)$(20)(5.0)%$(199)(53.9)%$43 9.4 %
The tax effects of temporary differences that gave rise to the deferred tax assets and liabilities are shown below:
December 31,
20252024
(Dollars in millions)
Deferred tax assets:
Investments$1,011 $1,428 
Policyholders' account balances63 60 
Bermuda deferred tax asset457 377 
Reinsurance recoverables3,877 3,920 
Loss carryforwards890 622 
Tax credit carryforwards42 88 
Other108 44 
Gross deferred tax assets6,448 6,539 
Valuation allowance(23)(20)
Deferred tax assets, net of valuation allowance6,425 6,519 
Deferred tax liabilities:
Deferred policy acquisition costs549 171 
Pension asset18 62 
VOBA1,912 2,060 
Future policy benefits4,126 4,199 
Other99 — 
Total deferred tax liabilities6,704 6,492 
Deferred tax assets (liabilities), net$(279)$27 
Below is a reconciliation of deferred tax assets (liabilities) as reported on the financial statements:
December 31,
20252024
(Dollars in millions)
Deferred tax asset$460 $495 
Deferred tax liability (1)(739)(468)
Deferred tax assets (liabilities), net$(279)$27 
(1) Deferred tax liabilities are included within “Other liabilities” in the Consolidated Statements of Financial Position.
The Company, excluding certain of its subsidiaries which file separate tax returns, are parties to a U.S. tax sharing agreement with its U.S. parent entity, BWS US Holdings, LLC. In accordance with its agreement, if the Company has taxable income, it pays its share of the consolidated federal income tax liability to its parent. However, if the Company incurs a tax loss, the tax benefit is recovered by decreasing subsequent year’s federal income tax payments to its parent.
Certain Bermuda subsidiaries of the Company are parties to a Bermuda tax sharing agreement with BWS Holdings Ltd., a direct subsidiary of Brookfield Wealth Solutions Ltd., the Company’s ultimate parent entity. Under this agreement, BWS Holdings Ltd. reimburses the Company’s Bermuda subsidiaries to the extent that BWS Holdings Ltd. or other Bermuda tax-resident affiliates utilize the Bermuda corporate income tax attributes of the Company’s Bermuda subsidiaries.
The Company evaluates its deferred tax assets based on, among other factors, historical operating results, expectation of future profitability, and the duration of the applicable statutory carryforward periods. As of December 31, 2025, the Company reported a valuation allowance of $23 million related to net operating loss and foreign tax credit carryforwards. Based on our evaluation, as of December 31, 2025, the Company determined that its remaining deferred tax assets would be realized within the applicable statutory carryforward period and that no additional valuation allowance was required.
Refer to Note 23 - Accumulated Other Comprehensive Income for deferred income tax recovery (expense) recognized in other comprehensive income.
As of December 31, 2025, the Company had net operating loss carryforwards of $4.2 billion and capital loss carryforwards of $75 million. Net operating loss carryforwards can be carried forward indefinitely. Capital loss carryforwards will begin to expire in 2029. In addition, the Company had foreign tax credits of $20 million and general business credit carryforwards of $22 million. Foreign tax credits expire in 2030. General business credit carryforwards expire in 2045.
As of December 31, 2025, there were no material income tax contingencies requiring recognition in our consolidated financial statements. Our tax returns are subject to audit by various federal, state and local tax authorities. The Company's income tax returns are subject to examination by the IRS and state tax authorities, generally for three years after they are due or filed, whichever is later. Federal income tax returns for tax years 2022 to 2024 are open to examination by the IRS.
Under the Inflation Reduction Act of 2022, a 15% corporate alternative minimum tax (“CAMT”) is imposed on the adjusted financial statement income of certain large corporations, effective for taxable years beginning after December 31, 2022. The impact of the CAMT, if any, will vary from year to year, based on the relationship between our adjusted financial statement income and our taxable income and if incurred, is creditable against future CAMT liabilities. As of December 31, 2025, the Company is not expected to be subject to the CAMT and as such, had no impact to our Consolidated Statements of Operations.
Bermuda Corporate Income Tax Regime
In December 2023, the Government of Bermuda enacted a corporate income tax (“CIT”) regime, designed to align with the Organization for Economic Cooperation and Development’s (“OECD”) global minimum tax rules. The Corporate Income Tax Act 2023 came into operation in its entirety on January 1, 2025. The regime applies a 15% CIT to Bermuda businesses that are part of Multinational Enterprise (“MNE”) groups with annual revenue of €750 million or more. On December 11, 2025, the Government of Bermuda enacted further amendments to the Bermuda Tax Act to align the calculation of the ETA with the Administrative Guidance issued by OECD in January 2025. Under these changes, any deferred tax liability that would otherwise arise solely from the mechanical calculation of the ETA is eliminated by reducing the amount to zero. As a result of these amendments, the Company increased its deferred tax asset by $80 million in 2025. As of December 31, 2025, the Company had a current tax asset of $44 million and a deferred tax asset of $457 million related to this regime.
Other Tax Matters
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes provisions that allow for the immediate expensing of domestic research and development expenses, immediate expensing of certain capital expenditures and other changes to the U.S. taxation of profits derived from foreign operations. The new legislation did not have a material impact to our consolidated financial statements.

Historical Timeline

Fiscal YearFiled
2025Mar 31, 2026Showing above
2024Mar 31, 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.

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