BANK OF AMERICA CORP /DE/BAC
BANK OF AMERICA CORP /DE/ Income Taxes Disclosure
Income Taxes
The Corporation pays taxes in U.S. and Non-U.S. jurisdictions based on income. The table below presents income before income tax expense disaggregated by U.S. and Non-U.S. jurisdictions for 2025, 2024 and 2023.
| Income Before Income Tax Expense | |||||||||||||||||
| December 31 | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| U.S. | $ | 28,813 | $ | 24,251 | $ | 23,978 | |||||||||||
Non-U.S. (1) | 8,882 | 8,972 | 8,552 | ||||||||||||||
| Income before income tax expense | $ | 37,695 | $ | 33,223 | $ | 32,530 | |||||||||||
(1) Income is related to the tax jurisdiction of the legal entity’s principal place of business.
The components of income tax expense for 2025, 2024 and 2023 are presented in the table below.
| Income Tax Expense | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current income tax expense | |||||||||||||||||
| U.S. federal | $ | 4,202 | $ | 4,709 | $ | 4,760 | |||||||||||
| U.S. state and local | 442 | 603 | 559 | ||||||||||||||
| Non-U.S. | 2,247 | 2,065 | 1,918 | ||||||||||||||
| Total current expense | 6,891 | 7,377 | 7,237 | ||||||||||||||
Deferred income tax expense (benefit) | |||||||||||||||||
| U.S. federal | (114) | (1,679) | (1,233) | ||||||||||||||
| U.S. state and local | 239 | 153 | (62) | ||||||||||||||
| Non-U.S. | 170 | 399 | 283 | ||||||||||||||
Total deferred expense (benefit) | 295 | (1,127) | (1,012) | ||||||||||||||
| Total income tax expense | $ | 7,186 | $ | 6,250 | $ | 6,225 | |||||||||||
Total income tax expense does not reflect the tax effects of items that are included in OCI each period. For more information, see Note 14 – Accumulated Other Comprehensive Income (Loss)). Other tax effects included in OCI each period resulted in an expense of $1.0 billion, $1.5 billion and $892 million in 2025, 2024 and 2023, respectively.
Income tax expense for 2025, 2024 and 2023 varied from the amount computed by applying the statutory income tax rate to income before income taxes. The Corporation’s federal statutory tax rate was 21 percent for 2025, 2024 and 2023. A reconciliation of the expected U.S. federal income tax expense, calculated by applying the federal statutory tax rate, to the Corporation’s actual income tax expense, and the effective tax rates for 2025, 2024 and 2023 are presented in the following table.
| Reconciliation of Income Tax Expense | |||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| Expected U.S. federal income tax expense | $ | 7,916 | 21.0 | % | $ | 6,976 | 21.0 | % | $ | 6,831 | 21.0 | % | |||||||||||||||||||||||
| Increase (decrease) in taxes resulting from: | |||||||||||||||||||||||||||||||||||
| State and local income tax, net of federal income tax deduction | 726 | 2.0 | 690 | 2.1 | 331 | 1.0 | |||||||||||||||||||||||||||||
| Tax credits | |||||||||||||||||||||||||||||||||||
| PTCs and LIHTCs accounted for under PAM | (633) | (1.7) | (587) | (1.8) | (600) | (1.8) | |||||||||||||||||||||||||||||
| ITCs and other PTCs | (705) | (1.9) | (924) | (2.8) | (568) | (1.7) | |||||||||||||||||||||||||||||
| Other | (216) | (0.6) | (307) | (0.9) | (227) | (0.7) | |||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Tax-exempt income, including dividends | (405) | (1.1) | (477) | (1.4) | (411) | (1.3) | |||||||||||||||||||||||||||||
| Nondeductible expenses | 419 | 1.1 | 426 | 1.2 | 405 | 1.2 | |||||||||||||||||||||||||||||
| Other | (215) | (0.6) | (15) | — | (24) | (0.1) | |||||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (187) | (0.5) | (99) | (0.3) | (26) | (0.1) | |||||||||||||||||||||||||||||
| Foreign tax effects | 550 | 1.5 | 586 | 1.7 | 381 | 1.2 | |||||||||||||||||||||||||||||
| Effect of cross-border tax laws | (205) | (0.5) | (175) | (0.5) | (83) | (0.3) | |||||||||||||||||||||||||||||
| Changes in valuation allowances | 149 | 0.4 | 224 | 0.7 | 303 | 0.9 | |||||||||||||||||||||||||||||
| Other | (8) | — | (68) | (0.2) | (87) | (0.2) | |||||||||||||||||||||||||||||
| Total income tax expense (benefit) | $ | 7,186 | 19.1 | % | $ | 6,250 | 18.8 | % | $ | 6,225 | 19.1 | % | |||||||||||||||||||||||
Tax credits originate from investments in affordable housing and renewable energy partnerships and similar entities. Increases in tax credits recognized in 2025 and 2024, compared to 2023, were primarily driven by the Corporation’s growth in the volume of investments in wind and solar renewable energy production facilities. For more information, see Note 6 – Securitizations and Other Variable Interest Entities.
The majority (greater than 50 percent) of the state and local income taxes, net of federal income tax deduction, in the respective periods above were attributable to New York City, New York State and California in 2025; California, New York State and New York City in 2024; and New York State and New York City in 2023.
The reconciliation of the beginning unrecognized tax benefits (UTB) balance to the ending balance is presented in the table below.
| Reconciliation of the Change in Unrecognized Tax Benefits | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance, January 1 | $ | 684 | $ | 811 | $ | 1,056 | |||||||||||
Increases related to positions taken during the current year | 54 | 55 | 76 | ||||||||||||||
Increases related to positions taken during prior years (1) | 24 | 39 | 139 | ||||||||||||||
Decreases related to positions taken during prior years (1) | (214) | (134) | (32) | ||||||||||||||
| Settlements | (46) | (62) | (380) | ||||||||||||||
| Expiration of statute of limitations | (19) | (25) | (48) | ||||||||||||||
| Balance, December 31 | $ | 483 | $ | 684 | $ | 811 | |||||||||||
(1) The sum of the positions taken during prior years differs from the $(187) million, $(99) million and $(26) million in the Reconciliation of Income Tax Expense table due to temporary items, state items and jurisdictional offsets, as well as the inclusion of interest in the Reconciliation of Income Tax Expense table.
At December 31, 2025, 2024 and 2023, the balance of the Corporation’s UTBs which would, if recognized, affect the Corporation’s effective tax rate was $415 million, $573 million and $671 million, respectively. Included in the UTB balance are some items the recognition of which would not affect the effective tax rate, such as the tax effect of certain temporary differences, the portion of gross state UTBs that would be offset by the tax benefit of the associated federal deduction and the portion of gross non-U.S. UTBs that would be offset by tax reductions in other jurisdictions.
The Corporation recognized an interest benefit of $26 million in 2025, interest benefit of $9 million in 2024 and interest expense of $35 million in 2023. At 2025 and 2024, the Corporation’s accrual for interest and penalties that related to income taxes, net of taxes and remittances, was $72 million and $105 million.
The Corporation files income tax returns in more than 60 states and municipalities and more than 40 non-U.S. jurisdictions each year. The IRS and other tax authorities in countries and states in which the Corporation has significant business operations examine tax returns periodically (continuously in some jurisdictions). The table below summarizes the status of examinations by major jurisdiction for the Corporation and various subsidiaries at December 31, 2025.
| Tax Examination Status | |||||||||||
Years under Examination (1) | Status at December 31, 2025 | ||||||||||
| United States | 2017-2023 | Field Examination | |||||||||
| California | 2018-2021 | Field Examination | |||||||||
| New York | 2022-2024 | Field Examination | |||||||||
| New York City | 2022-2024 | To begin in 2026 | |||||||||
United Kingdom (2) | 2021-2023 | Field Examination | |||||||||
(1) All tax years subsequent to the years shown remain subject to examination.
(2) Field examination for tax year 2024 to begin in 2026.
Significant components of the Corporation’s net deferred tax assets and liabilities at December 31, 2025 and 2024 are presented in the following table.
| Deferred Tax Assets and Liabilities | |||||||||||
| December 31 | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Tax attribute carryforwards | $ | 12,875 | 11,898 | ||||||||
| Allowance for credit losses | 3,415 | 3,463 | |||||||||
| Lease liability | 2,025 | 2,169 | |||||||||
| Employee compensation and retirement benefits | 1,807 | 1,760 | |||||||||
| Accrued expenses | 1,030 | 1,379 | |||||||||
| Security, loan and debt valuations | 559 | 2,680 | |||||||||
| Other | 2,469 | 2,339 | |||||||||
| Gross deferred tax assets | 24,180 | 25,688 | |||||||||
| Valuation allowance | (2,310) | (2,361) | |||||||||
| Total deferred tax assets, net of valuation allowance | 21,870 | 23,327 | |||||||||
| Deferred tax liabilities | |||||||||||
| Equipment lease financing | 3,246 | 3,021 | |||||||||
| Right-of-use asset | 1,873 | 2,025 | |||||||||
| Other | 1,747 | 1,920 | |||||||||
| Gross deferred tax liabilities | 6,866 | 6,966 | |||||||||
| Net deferred tax assets | $ | 15,004 | 16,361 | ||||||||
The table below summarizes the deferred tax assets and related valuation allowances recognized for the net operating loss (NOL) and tax credit carryforwards at December 31, 2025.
| Net Operating Loss and Tax Credit Carryforward Deferred Tax Assets | |||||||||||||||||||||||
| (Dollars in millions) | Deferred Tax Asset | Valuation Allowance | Net Deferred Tax Asset | First Year Expiring | |||||||||||||||||||
Net operating losses - U.K. (1) | $ | 7,447 | $ | — | $ | 7,447 | None | ||||||||||||||||
Net operating losses - other non-U.S. | 67 | (25) | 42 | Various | |||||||||||||||||||
Net operating losses - U.S. states (2) | 389 | (242) | 147 | Various | |||||||||||||||||||
| General business credits | 3,920 | — | 3,920 | After 2045 | |||||||||||||||||||
| Foreign tax credits | 1,052 | (1,052) | — | After 2028 | |||||||||||||||||||
(1)Represents U.K. broker-dealer net operating losses that may be carried forward indefinitely.
(2)The net operating losses and related valuation allowances for U.S. states before considering the benefit of federal deductions were $492 million and $307 million.
Management concluded that no valuation allowance was necessary to reduce the deferred tax assets related to the U.K. NOL carryforwards and U.S. federal and certain state NOL carryforwards since estimated future taxable income will be sufficient to utilize these assets prior to their expiration. Additionally, the Corporation’s U.K. net deferred tax assets consist primarily of NOLs that are expected to be realized in a U.K. subsidiary over an extended number of years. Management’s conclusion is supported by financial results, profit forecasts for the relevant entity and the indefinite period to carry forward NOLs. However, a material change in those estimates could lead management to reassess such valuation allowance conclusions.
At December 31, 2025, the Corporation did not record U.S. federal income taxes on temporary differences related to certain investments in non‑U.S. subsidiaries because these investments are considered to be permanently reinvested. If a deferred tax liability had been recognized, the amount would be approximately $1.0 billion.
The following table summarizes cash taxes paid, net of refunds received, for jurisdictions that represented five percent or more of total income taxes paid, net of refunds received.
| Income Taxes Paid | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
Taxes paid by jurisdiction | |||||||||||||||||
U.S. federal | $ | 1,050 | $ | 1,143 | $ | 775 | |||||||||||
U.S. state and local | |||||||||||||||||
California (1) | not required | not required | 230 | ||||||||||||||
| Other | 651 | 569 | 525 | ||||||||||||||
Total U.S. state and local | 651 | 569 | 755 | ||||||||||||||
| Non-U.S. | |||||||||||||||||
| United Kingdom | 433 | 578 | 519 | ||||||||||||||
| India | 272 | 292 | 266 | ||||||||||||||
| Other | 1,524 | 1,240 | 1,090 | ||||||||||||||
Total Non-U.S. | 2,229 | 2,110 | 1,875 | ||||||||||||||
Total income taxes paid | $ | 3,930 | $ | 3,822 | $ | 3,405 | |||||||||||
(1)Amounts are not required as the total for the periods presented is less than five percent of the total income taxes paid.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 24, 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.