eHealth, Inc.EHTH
eHealth, Inc. Income Taxes Disclosure
Income Taxes
The components of our income before income taxes were as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| United States | $ | 57,693 | $ | 17,707 | |||||||
| Foreign | 1,033 | 1,605 | |||||||||
Income before income taxes | $ | 58,726 | $ | 19,312 | |||||||
The federal, state and foreign income tax provision (benefit) is summarized as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Current: | |||||||||||
| Federal | $ | — | $ | — | |||||||
| State | 172 | (177) | |||||||||
| Foreign | 158 | 254 | |||||||||
| Total current | 330 | 77 | |||||||||
| Deferred: | |||||||||||
| Federal | 13,807 | 7,573 | |||||||||
| State | 4,545 | 1,605 | |||||||||
| Foreign | — | — | |||||||||
| Total deferred | 18,352 | 9,178 | |||||||||
| Provision for income taxes | $ | 18,682 | $ | 9,255 | |||||||
The state and foreign income taxes paid (net of refunds received) are summarized as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| US Federal | $ | — | $ | — | |||||||
| US State and Local | |||||||||||
| Texas | 171 | — | |||||||||
| Tennessee | 58 | — | |||||||||
| New York State | 50 | 75 | |||||||||
| North Carolina | 44 | 33 | |||||||||
| Oregon | 37 | — | |||||||||
| Massachusetts | 29 | 35 | |||||||||
| South Carolina | 19 | 42 | |||||||||
| New York City | 15 | 23 | |||||||||
| Other | 31 | 35 | |||||||||
| Indiana | (292) | — | |||||||||
| Total U.S. State and Local | 162 | 243 | |||||||||
| Foreign | |||||||||||
| China | 228 | 198 | |||||||||
| Total Foreign | 228 | 198 | |||||||||
| Total income taxes paid, net | $ | 390 | $ | 441 | |||||||
In 2025, we had consolidated income before income taxes of $58.7 million and provision for income taxes of $18.7 million, with an effective tax rate of 31.8%. In 2024, we had consolidated income before income taxes of $19.3 million and provision for income taxes of $9.3 million, with an effective tax rate of 47.9%.
The effective tax rate of our provision for (benefit from) income taxes differs from the federal statutory rate as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Tax expense computed at U.S. federal statutory income tax rate | $ | 12,332 | 21.0 | % | $ | 4,056 | 21.0 | % | |||||||||||||||
Domestic state and local income taxes, net of federal effect (1) | 3,938 | 6.7 | % | 1,078 | 5.6 | % | |||||||||||||||||
| Foreign tax effects | (59) | (0.1) | % | (83) | (0.4) | % | |||||||||||||||||
| Tax credits | |||||||||||||||||||||||
| Research and development tax credits | (1,075) | (1.8) | % | (921) | (4.8) | % | |||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||
| Lobbying Expense | — | — | % | 261 | 1.4 | % | |||||||||||||||||
| Net shortfalls from stock-based compensation | 1,968 | 3.4 | % | 2,092 | 10.8 | % | |||||||||||||||||
| Nondeductible executive compensation | — | — | % | 1,383 | 7.2 | % | |||||||||||||||||
| Other | 954 | 1.6 | % | 133 | 0.6 | % | |||||||||||||||||
| Effect of cross-border tax laws | |||||||||||||||||||||||
| Global intangible low-taxed income | 96 | 0.2 | % | 239 | 1.2 | % | |||||||||||||||||
| Changes in valuation allowance | — | — | % | (85) | (0.4) | % | |||||||||||||||||
| Other | |||||||||||||||||||||||
| Prior Period Adjustment | — | — | % | 655 | 3.4 | % | |||||||||||||||||
| Worldwide changes in unrecognized tax benefits | 528 | 0.8 | % | 447 | 2.3 | % | |||||||||||||||||
| Provision for Income Taxes/ Effective Tax Rate | $ | 18,682 | 31.8 | % | $ | 9,255 | 47.9 | % | |||||||||||||||
_______
(1)Taxes in IL, MI, NY, FL, GA, NJ and PA made up the majority (greater than 50 percent) of the tax effect in this category in 2025 and taxes in NY made up the majority of the tax effect in this category in 2024.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, together with operating losses and tax credit carryforwards.
The tax effects of significant items comprising our deferred taxes as of December 31, 2025 and 2024 were as follows (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 176,634 | $ | 160,610 | |||||||
| Intangible assets | 21,451 | 25,242 | |||||||||
| Research and development credits carryovers | 15,123 | 13,466 | |||||||||
| Accruals and reserves | 6,084 | 6,442 | |||||||||
| Operating lease liabilities | 5,274 | 6,912 | |||||||||
| Fixed assets | 1,003 | 982 | |||||||||
| Stock-based compensation | 833 | 759 | |||||||||
| Other | 3,545 | 2,809 | |||||||||
| Total deferred tax assets | 229,947 | 217,222 | |||||||||
| Valuation allowance | (5,775) | (5,206) | |||||||||
| Total deferred tax assets net of valuation allowance | 224,172 | 212,016 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Commissions receivable | (279,348) | (248,038) | |||||||||
| Right-of-use assets | (2,047) | (2,848) | |||||||||
| Total deferred tax liabilities | (281,395) | (250,886) | |||||||||
| Net deferred tax liabilities | $ | (57,223) | $ | (38,870) | |||||||
Assessing the realizability of our deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. We forecast taxable income by considering all available positive and negative evidence, including our history of operating income and losses and our financial plans and estimates that we use to manage the business. These assumptions require significant judgment about future taxable income. As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.
As of December 31, 2025, a valuation allowance of $5.8 million was recorded against California net deferred tax assets. The valuation allowance was recorded as a result of increased uncertainty regarding our future taxable income and a lack of sources of other taxable income to realize our net deferred tax assets in California. The remaining deferred tax assets are supported by the reversal of deferred tax liabilities.
The change in our valuation allowance is summarized as follows for the years ended (in thousands):
| Deferred Tax Assets - Valuation Allowance | Balance at beginning of year | Provision for income taxes | Write-offs and Deductions | Balance at end of year | ||||||||||||||||||||||
| December 31, 2025 | $ | 5,206 | $ | 654 | $ | (85) | $ | 5,775 | ||||||||||||||||||
| December 31, 2024 | 4,888 | 361 | (43) | 5,206 | ||||||||||||||||||||||
The net operating loss and tax credit carryforwards as of December 31, 2025 are summarized as follows (in thousands):
| Amount | Expires | |||||||||||||
| Net operating losses, federal (with expiration) | $ | 39,166 | 2034-2037 | |||||||||||
| Net operating losses, federal (without expiration) | 676,320 | Indefinite | ||||||||||||
| Net operating losses, state (with expiration) | 476,916 | 2026-2045 | ||||||||||||
| Tax credits, federal | 13,421 | 2026-2045 | ||||||||||||
| Tax credits, state | 13,976 | n/a | ||||||||||||
Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code and similar state provisions. These ownership change limitations may limit the amount of net operating loss carryforwards and other tax attributes that can be utilized annually to offset future taxable income and tax, respectively.
A reconciliation of the beginning and ending amount of our unrecognized tax benefits is as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Beginning balance | $ | 11,133 | $ | 10,639 | |||||||
| Reductions for tax positions of prior years | (243) | (363) | |||||||||
| Lapse of statute of limitations | (139) | (91) | |||||||||
| Additions based on tax positions related to the current year | 938 | 948 | |||||||||
Ending balance | $ | 11,689 | $ | 11,133 | |||||||
As of December 31, 2025, we had $11.7 million of gross unrecognized tax benefits. Of these, $6.6 million would favorably impact our effective tax rate in future periods if recognized, and $5.1 million will have no or minimal impact on the effective tax rate in future periods if recognized due to a valuation allowance on such unrecognized tax benefits. As of December 31, 2024, the total amount of gross unrecognized tax benefits was $11.1 million, of which $9.8 million, if recognized, would affect our effective tax rate.
We record interest and penalties related to unrecognized tax benefits in benefit from income taxes. As of December 31, 2025, the amount accrued for estimated interest related to uncertain tax positions was immaterial. We did not record an accrual for penalties.
We are subject to taxation in various jurisdictions, including federal, state and foreign. Our federal and state income tax returns are generally not subject to examination by taxing authorities for fiscal years before 2006 due to our credit carryforwards.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 19, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 14, 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.