ALLIANCE RESOURCE PARTNERS LP Income Taxes Disclosure

22.INCOME TAXES

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Components of income before income taxes were attributable to the following categories:

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Components of income tax expense disaggregated by jurisdiction are as follows:

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Reconciliations of income taxes at the U.S. federal statutory tax rate to income taxes at our effective tax rate are as follows:

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The effective income tax rate for our income tax expense for the years ended December 31, 2025 is less than the federal statutory rate, primarily due to the portion of income not subject to income tax.

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The effective income tax rates for our income tax expense for the years ended December 31, 2024 and 2023 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.

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Significant components of deferred tax liabilities and deferred tax assets are as follows:

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Deferred tax liabilities for property, plant and equipment are primarily the result of the Alliance Minerals’ election in 2022 to change its federal income tax status from a pass-through entity to a taxable entity and a non-cash acquisition gain recognized in 2019 related to the acquisition of AllDale I & II. Deferred tax liabilities for digital assets are due to the remeasurement of our digital assets to fair value, which is not taxable until the digital asset is sold. Deferred tax liabilities for equity investments are due to differences between the financial reporting and tax bases of equity investments of other subsidiaries that are taxable for federal income tax purposes.

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Federal and state loss carryovers and credits are primarily due to net operating losses and research and development credits associated with the operations of other subsidiaries that are taxable for federal income tax purposes. Research and development expenses from prior years were required to be capitalized and amortized for U.S. tax purposes, resulting in a deferred tax asset. These expenses are primarily associated with the operations of other subsidiaries that are taxable for federal income tax purposes. Deferred tax assets for federal loss carryovers and credits generally do not have an expiration date. Deferred tax assets for state loss carryovers and credits generally expire between 2028 and 2038 with some carryovers having indefinite carryforward periods.

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The following table summarizes income taxes paid (net of refunds received) by jurisdiction:

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Our 2020 through 2024 tax years remain open to examination by tax authorities, and lower-tier partnership income tax returns for the tax years ended December 31, 2020 and 2021 are being audited by the Internal Revenue Service.