Equitable Holdings, Inc.EQH
Equitable Holdings, Inc. Income Taxes Disclosure
INCOME TAXES
Earnings before income taxes and income tax (expense) benefit in the consolidated statements of income (loss) consist of:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||||||||
| United States | $ | (1,366) | $ | 1,867 | $ | 609 | |||||||||||
| Foreign | 173 | 209 | 105 | ||||||||||||||
| Total | $ | (1,193) | $ | 2,076 | $ | 714 | |||||||||||
| Income tax expense: | |||||||||||||||||
| Federal | $ | (757) | $ | (33) | $ | 57 | |||||||||||
| State and local | (83) | (46) | (49) | ||||||||||||||
| Foreign | (52) | (63) | (37) | ||||||||||||||
Current tax (expense) benefit | (892) | (142) | (29) | ||||||||||||||
| Deferred tax (expense) benefit | 1,048 | (138) | 939 | ||||||||||||||
Income tax (expense) benefit | $ | 156 | $ | (280) | $ | 910 | |||||||||||
The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 2 - Significant Accounting Policies — Adoption of New Accounting Pronouncements for additional details on the adoption of ASU 2023-09.
The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before income taxes and noncontrolling interest by the expected Federal income tax rate of 21%. The sources of the difference and their tax effects were as follows:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||||||||||||||
| Expected income tax (expense) benefit | $ | 250 | (21) | % | $ | (435) | (21) | % | $ | (151) | (21) | % | |||||||||||||||||||||||
| State and local income tax, net of federal income tax effect (1) | (70) | 6 | % | (40) | (2) | % | (42) | (6) | % | ||||||||||||||||||||||||||
Foreign tax effects: | |||||||||||||||||||||||||||||||||||
| Statutory tax rate differential | (10) | 1 | % | (7) | 0 | % | (12) | (2) | % | ||||||||||||||||||||||||||
| Valuation Allowance | — | 0 | % | — | 0 | % | 14 | 2 | % | ||||||||||||||||||||||||||
Tax credits | 43 | (4) | % | 29 | 1 | % | 16 | 2 | % | ||||||||||||||||||||||||||
Changes in valuation allowances | (176) | 15 | % | — | 0 | % | 1,000 | 140 | % | ||||||||||||||||||||||||||
Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
| Nontaxable investment income | 92 | (7) | % | 121 | 6 | % | 64 | 9 | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (13) | 1 | % | (6) | 0 | % | (4) | (1) | % | ||||||||||||||||||||||||||
Other adjustments: | |||||||||||||||||||||||||||||||||||
| Compensation | 2 | 0 | % | (3) | 0 | % | (10) | (1) | % | ||||||||||||||||||||||||||
| Tax audit interest | (15) | 1 | % | (28) | (1) | % | (23) | (3) | % | ||||||||||||||||||||||||||
| Noncontrolling interest | 54 | (5) | % | 88 | 4 | % | 62 | 9 | % | ||||||||||||||||||||||||||
| Other | (1) | 0 | % | 1 | 0 | % | (4) | (1) | % | ||||||||||||||||||||||||||
Income tax (expense) benefit and effective tax rate | $ | 156 | (13) | % | $ | (280) | (13) | % | $ | 910 | 127 | % | |||||||||||||||||||||||
______________
(1)The states that contributed to the majority (greater than 50%) of the tax effect in this category include California, Illinois, New York and New Jersey for 2025.
The components of the net deferred income taxes are as follows:
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
| Compensation and related benefits | $ | 254 | $ | — | $ | 217 | $ | — | |||||||||||||||
| Net operating loss and credits | — | — | 272 | — | |||||||||||||||||||
| Reserves and reinsurance | 3,545 | — | 1,984 | — | |||||||||||||||||||
| DAC | — | 1,122 | — | 1,141 | |||||||||||||||||||
| Unrealized investment gains/losses | 1,042 | — | 1,683 | — | |||||||||||||||||||
| Investments | — | 614 | — | 380 | |||||||||||||||||||
| Other | — | 67 | — | 197 | |||||||||||||||||||
Capital losses | 272 | — | — | — | |||||||||||||||||||
| Valuation allowance | (201) | — | (217) | — | |||||||||||||||||||
| Total | $ | 4,912 | $ | 1,803 | $ | 3,939 | $ | 1,718 | |||||||||||||||
In 2022, the Company established a valuation allowance against its deferred tax asset related to unrealized capital losses in the available-for-sale securities portfolio. In 2023, management took actions to increase its available liquidity so that the Company has the ability and intent to hold the majority of securities in its available-for-sale portfolio to recovery. For liquidity and other purposes, the Company maintains a smaller pool of securities that it does not intend to hold to recovery. The Company maintains a valuation allowance against the deferred tax asset on available-for-sale securities that will not be held to recovery. Adjustments to the valuation allowance due to changes in the portfolio’s unrealized capital loss are recorded in OCI. Adjustments to the valuation allowance due to new facts or evidence are recorded in net income.
In the third quarter of 2025, The Company realized losses from the liquidity pool primarily due to the RGA reinsurance transaction, resulting in a deferred tax asset for realized capital losses. The valuation allowance against unrealized losses in OCI was reduced and a valuation allowance against the realized losses was established through net income.
For the year ended December 31, 2025, the Company recorded a decrease to the valuation allowance of $192 million in OCI and recorded an increase to the valuation allowance of $176 million in net income. For the year ended December 31, 2024, the Company recorded a decrease to the valuation allowance of $17 million in OCI and recorded no change to the valuation allowance in net income. As of the years ended December 31, 2025 and 2024, a valuation allowance of $201 million and $217 million, respectively, remains against the portion of the deferred tax asset that is still not more-likely-than-not to be realized.
The Company uses the aggregate portfolio approach related to the stranded or disproportionate income tax effects in accumulated other comprehensive income related to available-for-sale securities. Under this approach, the disproportionate tax effect remains intact as long as the investment portfolio remains.
The Company has Federal net operating loss carryforwards of $0 million and $510 million, for the years ending December 31, 2025 and 2024, respectively, which do not expire.
The Company provides income taxes on the unremitted earnings of non-U.S. corporate subsidiaries except to the extent that such earnings are indefinitely reinvested outside the United States. As of December 31, 2025, the Company did not record income taxes on undistributed earnings on some foreign subsidiaries because those earnings were indefinitely reinvested in the operations of those subsidiaries. If such earnings were to be distributed, the Company would be subject to additional foreign withholding taxes and other tax consequences. At existing applicable income tax rates, additional taxes of approximately $9 million would need to be provided if such earnings are remitted.
A reconciliation of unrecognized tax benefits (excluding interest and penalties) follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
| Balance, beginning of period | $ | 330 | $ | 322 | $ | 314 | |||||||||||
| Additions for prior year tax positions | 12 | 8 | 11 | ||||||||||||||
| Reductions for prior year tax positions | — | — | (3) | ||||||||||||||
| Additions for current year tax positions | — | — | — | ||||||||||||||
| Reductions for current year tax positions | — | — | — | ||||||||||||||
| Reductions related to closed years/settlements with tax authorities | — | — | — | ||||||||||||||
| Balance, end of period | $ | 342 | $ | 330 | $ | 322 | |||||||||||
| Unrecognized tax benefits that, if recognized, would impact the effective rate | $ | 87 | $ | 74 | $ | 59 | |||||||||||
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in tax expense. Interest and penalties included in the amounts of unrecognized tax benefits as of December 31, 2025 and 2024 were $144 million and $114 million, respectively. For 2025, 2024 and 2023, respectively, there were $30 million, $28 million and $23 million in interest expense (benefit) related to unrecognized tax benefits.
As of December 31, 2025, tax years 2014 through 2018 and 2020 through 2024 remain subject to examination by the IRS.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 8, 2019 | |
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.