CVR ENERGY INCCVI
CVR ENERGY INC Income Taxes Disclosure
(13) Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted, introducing significant amendments to federal tax law and permanently extending several provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”). The Company expects to benefit from the permanent extension of certain TCJA provisions, including 100% bonus depreciation and modifications to the business interest limitation. The Company does not anticipate any material impacts to its income tax balances as a result of the OBBB, but will continue to monitor legislative developments and evaluate any potential future impacts of the new law on its consolidated financial statements.
As of December 31, 2025 and 2024, the Company had receivables of $2 million and $11 million, respectively, from the Internal Revenue Service (“IRS”) and certain state jurisdictions, which are presented within Other current assets in the Consolidated Balance Sheets.
Income Tax (Benefit) Expense
Income tax (benefit) expense is comprised of the following:
| Year Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (1) | $ | 23 | $ | 118 | |||||||||||
| State | (1) | — | 9 | ||||||||||||||
| Total current | (2) | 23 | 127 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 12 | (33) | 73 | ||||||||||||||
| State | (20) | (16) | 7 | ||||||||||||||
| Total deferred | (8) | (49) | 80 | ||||||||||||||
Total income tax (benefit) expense | $ | (10) | $ | (26) | $ | 207 | |||||||||||
The following is a reconciliation of total income tax (benefit) expense to income tax (benefit) expense computed by applying the statutory federal income tax rate to pretax income:
| Year Ended December 31, | ||||||||||||||||||||||||||
| (in millions, except percentages) | 2025 | 2024 | 2023 | |||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 17 | 21.0 | % | $ | 4 | 21.0 | % | $ | 228 | 21.0 | % | ||||||||||||||
State Income Taxes, Net of Federal Income Tax Effect (1) | ||||||||||||||||||||||||||
| State income taxes, net of federal income tax effect | (8) | (10.0) | (4) | (21.1) | 33 | 3.0 | ||||||||||||||||||||
| State tax incentives, net of federal income tax effect | (9) | (11.0) | (9) | (47.5) | (11) | (1.0) | ||||||||||||||||||||
| Tax Credits | ||||||||||||||||||||||||||
| Renewable fuel incentives | — | — | (10) | (52.7) | (15) | (1.4) | ||||||||||||||||||||
| Nontaxable or Nondeductible Items | ||||||||||||||||||||||||||
| Noncontrolling interest | (13) | (16.3) | (8) | (42.2) | (23) | (2.1) | ||||||||||||||||||||
| Executive compensation | 3 | 3.8 | 1 | 5.3 | 4 | 0.4 | ||||||||||||||||||||
| Other | — | — | — | — | 1 | 0.1 | ||||||||||||||||||||
| Changes in Unrecognized Tax Benefits | — | — | — | — | (10) | (0.9) | ||||||||||||||||||||
| Effective Tax Rate | $ | (10) | (12.5) | % | $ | (26) | (137.2) | % | $ | 207 | 19.1 | % | ||||||||||||||
(1)State taxes in Kansas and Oklahoma represented the majority (greater than 50 percent) of the tax effect in this category.
Income Taxes Paid (Net of Refunds Received)
Income taxes paid (net of refunds received) is comprised of the following:
| Year Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Federal | $ | (7) | $ | 51 | $ | 78 | |||||||||||
| State | |||||||||||||||||
| Arkansas | (1) | — | — | ||||||||||||||
| Kansas | (3) | 7 | 8 | ||||||||||||||
| Other | — | 2 | 7 | ||||||||||||||
| Total state | (4) | 9 | 15 | ||||||||||||||
| Total income taxes paid (refunded) | $ | (11) | $ | 60 | $ | 93 | |||||||||||
Deferred Tax Assets and Liabilities
The income tax effect of temporary differences that give rise to the Deferred income tax assets and Deferred income tax liabilities at December 31, 2025 and 2024 are as follows:
| December 31, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Deferred income tax assets: | |||||||||||
| Personnel accruals | $ | 11 | $ | 10 | |||||||
| Right of use lease liability | 13 | 14 | |||||||||
| Contingent liabilities | 15 | 56 | |||||||||
| State tax credit carryforward, net | 26 | 17 | |||||||||
| Net operating loss carryforward | 8 | — | |||||||||
| Interest expense | 12 | 2 | |||||||||
| Other | 2 | 1 | |||||||||
| Total gross deferred income tax assets | 87 | 100 | |||||||||
| Deferred income tax liabilities: | |||||||||||
| Unrealized gains/losses | (2) | (1) | |||||||||
| Right of use lease asset | (13) | (14) | |||||||||
| Investment in CVR Partners | (50) | (55) | |||||||||
| Property, plant and equipment | (229) | (274) | |||||||||
| Turnaround costs | (59) | (31) | |||||||||
| Other | (3) | (2) | |||||||||
| Total gross deferred income tax liabilities | (356) | (377) | |||||||||
| Net deferred income tax liabilities | $ | (269) | $ | (277) | |||||||
Although realization is not assured, management believes that it is more likely than not that all of the deferred income tax assets will be realized, and therefore, no valuation allowance was recognized as of December 31, 2025 and 2024.
As of December 31, 2025, CVR Energy has a federal net operating loss carry forward of approximately $31 million which can be carried forward indefinitely subject to a limitation of 80% of taxable income for each tax year. As of December 31, 2025, CVR Energy has state tax credits of approximately $33 million, which are available to reduce future state income taxes. These credits, if not used, will begin expiring in 2040.
Uncertain Tax Positions
A reconciliation of unrecognized tax benefits is as follows:
| Year Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance, beginning of year | $ | 1 | $ | 1 | $ | 11 | |||||||||||
| Reductions related to expirations from statute of limitations | — | — | (10) | ||||||||||||||
| Balance, end of year | $ | 1 | $ | 1 | $ | 1 | |||||||||||
Included in the balance of unrecognized tax benefits as of December 31, 2025, 2024, and 2023 are $1 million, $1 million, and $1 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. No unrecognized tax benefits were netted with Deferred income tax asset carryforwards as of December 31, 2025 and 2024. The remaining unrecognized tax benefits are included in Other long-term liabilities in the Consolidated Balance Sheets.
At December 31, 2025, the Company’s tax filings are open to examination in the United States for the tax years ended December 31, 2022 through December 31, 2024 and in various individual states for the tax years ended December 31, 2020
through December 31, 2024. The Company and its wholly owned partnership are under examination by the IRS for the tax years ended December 31, 2023, and December 31, 2022, respectively. These examinations are ongoing, and no proposed adjustments have been issued to date.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 19, 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.