DELTA AIR LINES, INC.DAL
DELTA AIR LINES, INC. Income Taxes Disclosure
INCOME TAXES
Income Tax Provision
| Components of income tax provision | |||||||||||
Year Ended December 31, | |||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||
| Current tax provision: | |||||||||||
| Federal | $ | (10) | $ | — | $ | — | |||||
| State and local | (17) | (35) | (8) | ||||||||
| International | (44) | (11) | (11) | ||||||||
| Deferred tax provision: | |||||||||||
| Federal | (970) | (1,038) | (896) | ||||||||
| State and local | (139) | (117) | (84) | ||||||||
| Income tax provision | $ | (1,180) | $ | (1,201) | $ | (999) | |||||
The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:
| Reconciliation of statutory federal income tax rate to the effective income tax rate | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions, except for percentages) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
| U.S. federal statutory income tax rate | $ | 1,299 | 21.0 | % | $ | 978 | 21.0 | % | $ | 1,178 | 21.0 | % | ||||||||
State and local income tax, net of federal income tax effect(1) | 123 | 2.0 | 115 | 2.5 | 112 | 2.0 | ||||||||||||||
| Nontaxable or nondeductible items | 41 | 0.7 | 59 | 1.3 | 46 | 0.8 | ||||||||||||||
| Changes in valuation allowances | (272) | (4.4) | 89 | 1.9 | (274) | (4.9) | ||||||||||||||
| Other | (11) | (0.2) | (40) | (0.9) | (63) | (1.1) | ||||||||||||||
| Effective income tax rate | $ | 1,180 | 19.1 | % | $ | 1,201 | 25.8 | % | $ | 999 | 17.8 | % | ||||||||
(1)New York City, New York, Georgia and California make up the majority (greater than 50%) of the tax effect in this category in 2024 and 2025. Georgia, New York City, New York and New Jersey make up the majority (greater than 50%) of the tax effect in this category in 2023.
Taxes paid across all jurisdictions were immaterial for all periods presented.
Deferred Taxes
We account for deferred income taxes under the asset and liability method. We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets and liabilities are net by jurisdiction and are recorded as noncurrent on the balance sheets.
We have elected to recognize Global Intangible Low-Taxed Income ("GILTI") in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years.
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes.
| Significant components of deferred income tax assets and liabilities | ||||||||
December 31, | ||||||||
| (in millions) | 2025 | 2024 | ||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | 694 | $ | 799 | ||||
| Pension, postretirement and other benefits | 916 | 1,205 | ||||||
| Investments | 593 | 936 | ||||||
| Deferred revenue | 2,254 | 2,158 | ||||||
| Lease liabilities | 2,660 | 2,816 | ||||||
| Other | 488 | 608 | ||||||
| Valuation allowance | (643) | (951) | ||||||
| Total deferred tax assets | $ | 6,962 | $ | 7,571 | ||||
| Deferred tax liabilities: | ||||||||
| Depreciation | $ | 7,839 | $ | 7,040 | ||||
| Operating lease assets | 1,264 | 1,369 | ||||||
| Intangible assets | 1,188 | 1,165 | ||||||
| Other | 114 | 78 | ||||||
| Total deferred tax liabilities | $ | 10,405 | $ | 9,652 | ||||
| Balance Sheet Position: | ||||||||
| Other noncurrent assets | $ | 1 | $ | 95 | ||||
| Deferred income taxes, net | 3,444 | 2,176 | ||||||
Net deferred tax liabilities | $ | 3,443 | $ | 2,081 | ||||
Valuation Allowance
A valuation allowance is recorded to reduce deferred tax assets when necessary. We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets. We establish valuation allowances if it is more likely than not that we will be unable to realize our deferred income tax assets. In making this determination, we consider available positive and negative evidence and make certain assumptions. We consider, among other things, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, our historical financial results and tax planning strategies.
At December 31, 2025 our net deferred tax liability balance was $3.4 billion, including a $643 million valuation allowance primarily related to certain net realized and unrealized capital losses and certain state net operating losses.
As of December 31, 2025, we had approximately $2.4 billion of U.S. federal pre-tax net operating loss carryforwards which we are expecting to utilize during 2026. These net operating loss carryforwards were primarily generated in 2020 and do not expire. Therefore, we have not recorded a valuation allowance on our deferred tax assets other than the certain net realized and unrealized capital losses and certain state net operating losses that have short expiration periods.
The following table presents the balance of our valuation allowance on our deferred income tax assets and the associated activity:
| Valuation allowance activity | ||||||||
| (in millions) | 2025 | 2024 | ||||||
| Balance at January 1 | $ | 951 | $ | 877 | ||||
| Tax provision | (308) | 74 | ||||||
| Balance at December 31 | $ | 643 | $ | 951 | ||||
Other
The amount of, and changes to, our uncertain tax positions were not material in any of the years presented. We are currently under audit by the IRS for the 2025 and 2024 tax years.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The legislation did not have a material impact on our income tax expense or effective income tax rate for the year ended December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 13, 2017 | |
| 2015 | Feb 5, 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.