EXELON CORPEXC
EXELON CORP Income Taxes Disclosure
Income Taxes (All Registrants)
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Components of Income Tax Expense or Benefit
Income tax expense (benefit) from continuing operations is comprised of the following components:
| For the Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Included in operations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Federal | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | $ | 119 | $ | 143 | $ | 97 | $ | 74 | $ | 91 | $ | 47 | $ | 28 | $ | 20 | |||||||||||||||||||||||||||||||
| Deferred | 169 | (16) | (45) | 28 | 60 | 18 | 16 | 24 | |||||||||||||||||||||||||||||||||||||||
| Investment tax credit amortization | (1) | (1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| State | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | 13 | 80 | — | — | 16 | 7 | 8 | — | |||||||||||||||||||||||||||||||||||||||
| Deferred | 223 | 55 | (23) | 57 | 72 | 34 | 17 | 23 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 523 | $ | 261 | $ | 29 | $ | 159 | $ | 239 | $ | 106 | $ | 69 | $ | 67 | |||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Included in operations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Federal | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | $ | 42 | $ | 76 | $ | 51 | $ | 45 | $ | 97 | $ | 50 | $ | 29 | $ | 16 | |||||||||||||||||||||||||||||||
| Deferred | (27) | (76) | (46) | (42) | 21 | 3 | 3 | 20 | |||||||||||||||||||||||||||||||||||||||
| Investment tax credit amortization | (2) | (1) | — | — | (1) | — | — | — | |||||||||||||||||||||||||||||||||||||||
| State | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | 37 | 60 | — | — | 19 | 17 | 4 | — | |||||||||||||||||||||||||||||||||||||||
| Deferred | 157 | 57 | (17) | 46 | 53 | 20 | 13 | 19 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 207 | $ | 116 | $ | (12) | $ | 49 | $ | 189 | $ | 90 | $ | 49 | $ | 55 | |||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Included in operations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Federal | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | $ | 51 | $ | 130 | $ | 63 | $ | 67 | $ | 71 | $ | 54 | $ | 25 | $ | 9 | |||||||||||||||||||||||||||||||
| Deferred | 193 | 45 | (36) | 16 | (8) | (28) | (6) | 13 | |||||||||||||||||||||||||||||||||||||||
| Investment tax credit amortization | (2) | (1) | — | — | (1) | — | — | — | |||||||||||||||||||||||||||||||||||||||
| State | |||||||||||||||||||||||||||||||||||||||||||||||
| Current | 4 | (13) | — | — | 15 | 12 | 6 | — | |||||||||||||||||||||||||||||||||||||||
| Deferred | 128 | 153 | (7) | 50 | 39 | 13 | 10 | 14 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 374 | $ | 314 | $ | 20 | $ | 133 | $ | 116 | $ | 51 | $ | 35 | $ | 36 | |||||||||||||||||||||||||||||||
Rate Reconciliation
The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:
For the Year Ended December 31, 2025(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd(c) | PECO(d) | BGE | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 691 | 21.0 | % | $ | 296 | 21.0 | % | $ | 177 | 21.0 | % | $ | 155 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 187 | 5.7 | 107 | 7.6 | (18) | (2.1) | 45 | 6.1 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (13) | (0.4) | (6) | (0.4) | — | — | (3) | (0.4) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 13 | 0.4 | 1 | 0.1 | 1 | 0.1 | 1 | 0.2 | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (145) | (4.4) | (13) | (1.0) | (117) | (13.9) | (11) | (1.5) | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (208) | (6.3) | (123) | (8.7) | (14) | (1.7) | (28) | (3.8) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (2) | (0.1) | (1) | (0.1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 523 | 15.9 | % | $ | 261 | 18.5 | % | $ | 29 | 3.4 | % | $ | 159 | 21.6 | % | |||||||||||||||||||||||||||||||
For the Year Ended December 31, 2025(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| PHI | PEPCO | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 218 | 21.0 | % | $ | 106 | 21.0 | % | $ | 62 | 21.0 | % | $ | 53 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 70 | 6.7 | 32 | 6.3 | 20 | 6.8 | 18 | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (4) | (0.4) | (2) | (0.4) | (1) | (0.3) | (1) | (0.4) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 3 | 0.3 | 2 | 0.3 | (1) | (0.3) | 1 | 0.2 | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (5) | (0.5) | (3) | (0.6) | (1) | (0.3) | (1) | (0.4) | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (42) | (4.0) | (29) | (5.7) | (10) | (3.4) | (3) | (1.2) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (1) | (0.1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 239 | 23.0 | % | $ | 106 | 20.9 | % | $ | 69 | 23.5 | % | $ | 67 | 26.3 | % | |||||||||||||||||||||||||||||||
For the Year Ended December 31, 2024(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd(c) | PECO(d) | BGE(e) | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 560 | 21.0 | % | $ | 248 | 21.0 | % | $ | 113 | 21.0 | % | $ | 121 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 153 | 5.7 | 92 | 7.8 | (13) | (2.4) | 36 | 6.3 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (19) | (0.6) | (13) | (1.1) | — | — | (2) | (0.3) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 6 | 0.2 | 2 | 0.2 | — | — | 1 | 0.1 | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (120) | (4.5) | (8) | (0.7) | (96) | (17.8) | (8) | (1.4) | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (371) | (13.9) | (204) | (17.3) | (16) | (3.0) | (99) | (17.2) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (2) | (0.1) | (1) | (0.1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 207 | 7.8 | % | $ | 116 | 9.8 | % | $ | (12) | (2.2) | % | $ | 49 | 8.5 | % | |||||||||||||||||||||||||||||||
For the Year Ended December 31, 2024(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| PHI | PEPCO | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 195 | 21.0 | % | $ | 101 | 21.0 | % | $ | 54 | 21.0 | % | $ | 44 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 57 | 6.1 | 29 | 6.0 | 13 | 5.0 | 15 | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (4) | (0.4) | (2) | (0.4) | (1) | (0.4) | (1) | (0.5) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 1 | 0.1 | — | — | 1 | 0.4 | — | — | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (7) | (0.8) | (5) | (1.0) | (3) | (1.2) | 1 | 0.5 | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (52) | (5.6) | (33) | (6.8) | (15) | (5.8) | (4) | (1.9) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (1) | (0.1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 189 | 20.3 | % | $ | 90 | 18.8 | % | $ | 49 | 19.0 | % | $ | 55 | 26.2 | % | |||||||||||||||||||||||||||||||
For the Year Ended December 31, 2023(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO(d) | BGE | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 567 | 21.0 | % | $ | 295 | 21.0 | % | $ | 122 | 21.0 | % | $ | 130 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 104 | 3.8 | 111 | 7.9 | (6) | (1.0) | 40 | 6.5 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (16) | (0.6) | (8) | (0.6) | — | — | (3) | (0.5) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 7 | 0.3 | 1 | 0.2 | 2 | 0.2 | — | — | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (106) | (3.9) | (7) | (0.5) | (84) | (14.4) | (6) | (1.0) | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (180) | (6.7) | (77) | (5.5) | (14) | (2.4) | (28) | (4.5) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (2) | (0.1) | (1) | (0.1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 374 | 13.8 | % | $ | 314 | 22.4 | % | $ | 20 | 3.4 | % | $ | 133 | 21.5 | % | |||||||||||||||||||||||||||||||
For the Year Ended December 31, 2023(a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||
| PHI | PEPCO | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Federal Statutory Tax Rate | $ | 148 | 21.0 | % | $ | 75 | 21.0 | % | $ | 45 | 21.0 | % | $ | 33 | 21.0 | % | |||||||||||||||||||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of Federal income tax benefit | 43 | 6.1 | 20 | 5.5 | 13 | 6.1 | 11 | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Tax credits | (3) | (0.6) | (3) | (0.7) | (1) | (0.4) | (1) | (0.6) | |||||||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | — | 0.1 | 1 | 0.3 | — | — | 1 | 0.7 | |||||||||||||||||||||||||||||||||||||||
| Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | (10) | (1.5) | (8) | (2.2) | (2) | (0.8) | (1) | (0.6) | |||||||||||||||||||||||||||||||||||||||
| Excess deferred tax | (61) | (8.6) | (34) | (9.6) | (20) | (9.4) | (7) | (4.5) | |||||||||||||||||||||||||||||||||||||||
| Amortization of ITC, net deferred taxes | (1) | (0.1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 116 | 16.4 | % | $ | 51 | 14.3 | % | $ | 35 | 16.5 | % | $ | 36 | 23.1 | % | |||||||||||||||||||||||||||||||
__________
(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.
(b)Exelon and Registrants had no adjustments related to the following disclosure categories: Foreign Tax Effects, Effects of Changes in Tax law or Rates Enacted in the Current Period, Effects of Cross-Border Tax Laws, Changes in Valuation Allowances, and Changes in Unrecognized Tax Benefits.
(c)For ComEd, the lower effective tax rate is primarily due to CEJA which resulted in the acceleration of certain income tax benefits being provided to customers.
(d)For PECO, the lower effective tax rate is primarily related to state income taxes, net of federal income tax benefit and plant basis differences attributable to tax repair deductions.
(e)For BGE, the lower effective tax rate is primarily due to the Maryland Multi-year plan which resulted in the acceleration of certain tax benefits being provided to customers.
State and local Income Tax (Major Jurisdictions)
The state and local jurisdictions that comprise the majority of the effect of the state and local income tax, net of federal income taxes category by Registrant are presented below:
| 2025 | 2024 | 2023 | |||||||||||||||
| Exelon | IL, MD | IL, MD | MD, IL | ||||||||||||||
| ComEd | IL | IL | IL | ||||||||||||||
| PECO | PA | PA | PA | ||||||||||||||
| BGE | MD | MD | MD | ||||||||||||||
| PHI | MD, NJ | MD, NJ | MD, NJ | ||||||||||||||
| Pepco | MD | MD | MD | ||||||||||||||
| DPL | DE | DE | DE | ||||||||||||||
| ACE | NJ | NJ | NJ | ||||||||||||||
Tax Differences and Carryforwards
The tax effects of temporary differences and carryforwards, which give rise to significant portions of the deferred tax assets (liabilities), at December 31, 2025 and 2024 are presented below:
| At December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | $ | (13,989) | $ | (5,231) | $ | (2,676) | $ | (2,411) | $ | (3,596) | $ | (1,628) | $ | (1,033) | $ | (936) | |||||||||||||||||||||||||||||||
| Accrual based contracts | 18 | — | — | — | 5 | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Derivatives and other financial instruments | 26 | 36 | — | — | 1 | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Deferred pension and postretirement obligation | 506 | (382) | (41) | (20) | (60) | (57) | (28) | — | |||||||||||||||||||||||||||||||||||||||
| Deferred debt refinancing costs | 101 | (4) | — | (2) | 91 | (2) | (1) | (1) | |||||||||||||||||||||||||||||||||||||||
| Regulatory assets and liabilities | (1,756) | (490) | (324) | (39) | (122) | (36) | 29 | (25) | |||||||||||||||||||||||||||||||||||||||
| Tax loss carryforward, net of valuation allowances | 275 | — | 72 | 63 | 67 | — | 14 | 53 | |||||||||||||||||||||||||||||||||||||||
| Tax credit carryforward | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Corporate Alternative Minimum Tax | 553 | — | 289 | 142 | 71 | 44 | 17 | 20 | |||||||||||||||||||||||||||||||||||||||
| Investment in partnerships | (28) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other, net | 601 | 250 | 86 | 26 | 166 | 76 | 9 | 23 | |||||||||||||||||||||||||||||||||||||||
| Deferred income tax liabilities (net) | (13,693) | (5,821) | (2,594) | (2,241) | (3,377) | (1,603) | (993) | (866) | |||||||||||||||||||||||||||||||||||||||
| Unamortized investment tax credits | (15) | (7) | — | (1) | (7) | (1) | (3) | (3) | |||||||||||||||||||||||||||||||||||||||
| Total deferred income tax liabilities (net) and unamortized investment tax credits | $ | (13,708) | $ | (5,828) | $ | (2,594) | $ | (2,242) | $ | (3,384) | $ | (1,604) | $ | (996) | $ | (869) | |||||||||||||||||||||||||||||||
| At December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Plant basis differences | $ | (13,150) | $ | (5,069) | $ | (2,446) | $ | (2,232) | $ | (3,371) | $ | (1,512) | $ | (975) | $ | (881) | |||||||||||||||||||||||||||||||
| Accrual based contracts | 19 | — | — | — | 6 | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Derivatives and other financial instruments | 21 | 36 | — | — | 1 | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Deferred pension and postretirement obligation | 512 | (339) | (39) | (24) | (68) | (64) | (32) | — | |||||||||||||||||||||||||||||||||||||||
| Deferred debt refinancing costs | 108 | (4) | — | (2) | 98 | (3) | (1) | (1) | |||||||||||||||||||||||||||||||||||||||
| Regulatory assets and liabilities | (1,665) | (515) | (254) | (37) | (96) | (16) | 33 | (18) | |||||||||||||||||||||||||||||||||||||||
| Tax loss carryforward, net of valuation allowances | 283 | — | 63 | 78 | 68 | — | 16 | 51 | |||||||||||||||||||||||||||||||||||||||
| Tax credit carryforward | 142 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Corporate Alternative Minimum Tax | 369 | 47 | 166 | 95 | 2 | 2 | 4 | 8 | |||||||||||||||||||||||||||||||||||||||
| Investment in partnerships | (27) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other, net | 612 | 249 | 77 | 24 | 180 | 85 | 10 | 27 | |||||||||||||||||||||||||||||||||||||||
| Deferred income tax liabilities (net) | (12,776) | (5,595) | (2,433) | (2,098) | (3,180) | (1,508) | (945) | (814) | |||||||||||||||||||||||||||||||||||||||
| Unamortized investment tax credits | (10) | (6) | — | (1) | (3) | (1) | (1) | (2) | |||||||||||||||||||||||||||||||||||||||
| Total deferred income tax liabilities (net) and unamortized investment tax credits | $ | (12,786) | $ | (5,601) | $ | (2,433) | $ | (2,099) | $ | (3,183) | $ | (1,509) | $ | (946) | $ | (816) | |||||||||||||||||||||||||||||||
The following table provides federal and state tax attribute carryforwards at December 31, 2025 for Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE. The state net operating loss carryforwards and any corresponding valuation allowance are presented on a post-apportioned basis.
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Federal | |||||||||||||||||||||||||||||||||||||||||||||||
| Federal general business credits carryforwards | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Corporate Alternative Minimum Tax credit carryforward(a) | $ | 553 | $ | — | $ | 289 | $ | 142 | $ | 71 | $ | 44 | $ | 17 | $ | 20 | |||||||||||||||||||||||||||||||
| State | |||||||||||||||||||||||||||||||||||||||||||||||
| State net operating loss carryforwards | $ | 6,684 | $ | — | $ | 1,944 | $ | 972 | $ | 1,387 | $ | — | $ | 635 | $ | 752 | |||||||||||||||||||||||||||||||
| Deferred taxes on state tax attributes (net of federal taxes) | $ | 381 | $ | — | $ | 76 | $ | 63 | $ | 96 | $ | — | $ | 43 | $ | 53 | |||||||||||||||||||||||||||||||
Valuation allowance on state tax attributes (net of federal taxes)(b) | $ | 106 | $ | — | $ | 4 | $ | — | $ | 29 | $ | — | $ | 29 | $ | — | |||||||||||||||||||||||||||||||
Year in which net operating loss or credit carryforwards will begin to expire(c) | 2031 | N/A | 2031 | 2033 | 2031 | N/A | 2033 | 2031 | |||||||||||||||||||||||||||||||||||||||
__________
(a)For Exelon, PECO, BGE, PHI, Pepco, DPL, and ACE, the Corporate Alternative Minimum Tax credit carryforward has an indefinite carryforward period.
(b)For Exelon, a full valuation allowance has been recorded against certain separate company state net operating loss carryforwards that are expected to expire before realization. For PECO, a valuation allowance has been recorded against Pennsylvania net operating losses that are expected to expire before realization. For DPL, a full valuation allowance has
been recorded against Delaware net operating losses carryforwards due to a change in Delaware tax law that limits the ability of corporate taxpayers to monetize net operating losses.
(c)A portion of Exelon's, BGE's, and DPL's Maryland state net operating loss carryforward have an indefinite carryforward period.
Tabular Reconciliation of Unrecognized Tax Benefits
The following table presents changes in unrecognized tax benefits, for Exelon, PHI, DPL, and ACE. Amounts for ComEd, PECO, BGE, and Pepco are not material.
Exelon(a) | PHI | DPL | ACE | ||||||||||||||||||||
| Balance at January 1, 2023 | $ | 148 | $ | 59 | $ | 4 | $ | 17 | |||||||||||||||
| Change to positions that only affect timing | (57) | (9) | (2) | (2) | |||||||||||||||||||
| Increases based on tax positions related to 2023 | 3 | 1 | — | — | |||||||||||||||||||
| Increases based on tax positions prior to 2023 | 1 | — | — | — | |||||||||||||||||||
| Decreases based on tax positions prior to 2023 | (1) | — | — | — | |||||||||||||||||||
| Balance at December 31, 2023 | $ | 94 | $ | 51 | $ | 2 | $ | 15 | |||||||||||||||
| Change to positions that only affect timing | 10 | 10 | — | — | |||||||||||||||||||
| Increases based on tax positions related to 2024 | 4 | 1 | 10 | — | |||||||||||||||||||
| Increases based on tax positions prior to 2024 | 2 | — | — | — | |||||||||||||||||||
| Decreases based on tax positions prior to 2024 | (14) | (14) | — | (14) | |||||||||||||||||||
| Balance at December 31, 2024 | $ | 96 | $ | 48 | $ | 12 | $ | 1 | |||||||||||||||
| Change to positions that only affect timing | — | (1) | — | — | |||||||||||||||||||
| Increases based on tax positions related to 2025 | 3 | 1 | — | — | |||||||||||||||||||
| Increases based on tax positions prior to 2025 | 1 | — | — | — | |||||||||||||||||||
| Decreases based on tax positions prior to 2025 | — | — | — | — | |||||||||||||||||||
| Balance at December 31, 2025 | $ | 100 | $ | 48 | $ | 12 | $ | 1 | |||||||||||||||
______
(a)At December 31, 2025 and 2024, Exelon recorded a receivable of $31 million and $31 million, respectively, in noncurrent Other assets in the Consolidated Balance Sheet for Constellation’s share of unrecognized tax benefits for periods prior to the separation of Exelon and Constellation in February 2022.
Unrecognized Tax Benefits
The following table presents Exelon's unrecognized tax benefits that, if recognized, would decrease the effective tax rate. The Utility Registrants' amounts are not material.
| Exelon | |||||
| December 31, 2025 | $ | 83 | |||
| December 31, 2024 | 69 | ||||
| December 31, 2023 | 71 | ||||
At December 31, 2025 Exelon, PHI, and DPL have approximately $65 million, $6 million, and $1 million, respectively, of unrecognized federal tax benefits that could significantly change within the 12 months after the reporting date based on the outcome of pending refund claims that impacts the effective tax rate.
Total Amounts of Interest and Penalties Recognized
The following table represents the net interest and penalties receivable (payable) related to tax positions reflected in Exelon's Consolidated Balance Sheets. The Utility Registrants' amounts are not material.
| Net interest and penalties receivable at | Exelon | ||||
December 31, 2025 (a) | $ | 61 | |||
December 31, 2024 (b) | 76 | ||||
__________
(a)At December 31, 2025, Exelon classified $7 million and $54 million of the interest receivable as current and noncurrent, respectively, based on the expected timing for settlement in cash. At December 31, 2025, Exelon recorded a receivable of $12 million in noncurrent Other assets in the Consolidated Balance Sheet for Constellation's share of net interest for periods prior to the separation of Exelon and Constellation in February 2022.
(b)At December 31, 2024, Exelon classified $27 million and $49 million of the interest receivable as current and noncurrent, respectively, based on the expected timing for settlement in cash. At December 31, 2024, Exelon recorded a receivable of $9 million in noncurrent Other assets in the Consolidated Balance Sheet for Constellation's share of net interest for periods prior to the separation of Exelon and Constellation in February 2022.
The Registrants did not record material interest or penalties related to tax positions reflected in their Consolidated Balance Sheets. Interest and penalties are recorded in Interest expense, net and Other, net, respectively, in Other income and deductions in the Registrants' Consolidated Statements of Operations and Comprehensive Income.
Description of Tax Years Open to Assessment by Major Jurisdiction
| Major Jurisdiction | Open Years | Registrants Impacted | |||||||||
Federal consolidated income tax returns(a) | 2010-2024 | All Registrants | |||||||||
| Delaware separate corporate income tax returns | 2010-2024 | DPL | |||||||||
| District of Columbia combined corporate income tax returns | 2022-2024 | Exelon, PHI, Pepco | |||||||||
| Illinois unitary corporate income tax returns | 2012-2024 | Exelon, ComEd | |||||||||
| Maryland separate company corporate net income tax returns | 2010-2024 | BGE, Pepco, DPL | |||||||||
| New Jersey combined corporate income tax returns | 2021-2024 | Exelon | |||||||||
| New Jersey separate corporate income tax returns | 2021-2024 | ACE | |||||||||
| Pennsylvania separate corporate income tax returns | 2021-2024 | Exelon | |||||||||
| Pennsylvania separate corporate income tax returns | 2021-2024 | PECO | |||||||||
__________
(a)Certain registrants are only open to assessment for tax years since joining the Exelon federal consolidated group; BGE beginning in 2012 and PHI, Pepco, DPL, and ACE beginning in 2016.
Tax Payments (Refunds) by Major Jurisdiction
| For the Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
Federal(a) | $ | — | $ | 128 | $ | (186) | $ | (95) | $ | 88 | $ | 69 | $ | 13 | $ | 11 | |||||||||||||||||||||||||||||||
| Delaware | 8 | — | — | — | 8 | — | 7 | — | |||||||||||||||||||||||||||||||||||||||
| District of Columbia | — | — | — | — | 4 | 6 | — | — | |||||||||||||||||||||||||||||||||||||||
| Illinois | (1) | 96 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Maryland | 14 | — | — | — | 14 | 13 | — | — | |||||||||||||||||||||||||||||||||||||||
| Pennsylvania | (10) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other States | 1 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Total Payments (Refunds) | $ | 12 | $ | 224 | $ | (186) | $ | (95) | $ | 114 | $ | 88 | $ | 20 | $ | 11 | |||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Federal | $ | 54 | $ | 188 | $ | 128 | $ | 100 | $ | 119 | $ | 62 | $ | 43 | $ | 20 | |||||||||||||||||||||||||||||||
| Delaware | 13 | — | — | — | 13 | — | 13 | — | |||||||||||||||||||||||||||||||||||||||
| District of Columbia | — | — | — | — | 5 | 21 | — | — | |||||||||||||||||||||||||||||||||||||||
| Illinois | — | 62 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Maryland | 13 | — | — | — | 13 | 13 | — | — | |||||||||||||||||||||||||||||||||||||||
| Pennsylvania | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other States | 1 | — | — | — | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||||
| Total Payments | $ | 81 | $ | 250 | $ | 128 | $ | 100 | $ | 150 | $ | 96 | $ | 57 | $ | 20 | |||||||||||||||||||||||||||||||
| For the Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exelon | ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | ||||||||||||||||||||||||||||||||||||||||
| Federal | $ | 18 | $ | 40 | $ | (24) | $ | 29 | $ | 25 | $ | 14 | $ | 6 | $ | 9 | |||||||||||||||||||||||||||||||
| Delaware | 2 | — | — | — | 2 | — | — | — | |||||||||||||||||||||||||||||||||||||||
| District of Columbia | — | — | — | — | (6) | (8) | — | — | |||||||||||||||||||||||||||||||||||||||
| Illinois | — | (28) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Maryland | 1 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Pennsylvania | (1) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other States | (10) | (1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Total Payments (Refunds) | $ | 10 | $ | 11 | $ | (24) | $ | 29 | $ | 21 | $ | 6 | $ | 6 | $ | 9 | |||||||||||||||||||||||||||||||
(a)In 2025, Exelon received a one-time federal refund claim that reduced current year federal tax payments to a net zero.
Other Tax Matters
Tax Matters Agreement (Exelon)
In February 2022, in connection with the separation between Exelon and Constellation, the parties entered into a TMA. The TMA governs the respective rights, responsibilities, and obligations between Exelon and Constellation after the separation with respect to tax liabilities, refunds and attributes for open tax years that Constellation was part of Exelon’s consolidated group for U.S. federal, state, and local tax purposes.
Indemnification for Taxes. As a former subsidiary of Exelon, Constellation has joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods prior to the separation. The TMA specifies that Constellation is liable for their share of taxes required to be paid by Exelon with respect to taxable periods prior to the separation to the extent Constellation would have been responsible for such taxes under the existing Exelon tax sharing agreement when Constellation was included in Exelon's consolidated group. At December 31, 2025, there is no balance due to or from Constellation.
Tax Refunds. The TMA specifies that Constellation is entitled to their share of any future tax refunds claimed by Exelon with respect to taxable periods prior to the separation to the extent that Constellation would have received such tax refunds under the existing Exelon tax sharing agreement when Constellation was included in Exelon's consolidated group. At December 31, 2025, there is no balance due to or from Constellation.
Tax Attributes. At the date of separation certain tax attributes, primarily tax credit carryforwards, that were generated by Constellation prior to the separation, were required by law to be allocated to Exelon. The TMA also provides that Exelon will reimburse Constellation when those allocated tax attribute carryforwards are utilized. In 2025, Exelon remitted $143 million of payments to Constellation for the utilization of pre-separation tax credit carryforwards. At December 31, 2025, Exelon recorded a payable of $175 million and $21 million in Other current liabilities and Other deferred credits and other liabilities, respectively, in the Consolidated Balance Sheet for tax attribute carryforwards that are expected to be utilized and reimbursed to Constellation.
Corporate Alternative Minimum Tax (All Registrants)
On August 16, 2022, the IRA was signed into law and implemented a new corporate alternative minimum tax (CAMT) that imposes a 15.0% tax on modified GAAP net income. Corporations will now pay the greater of 15.0% of financial statement pre-tax income (with certain adjustments) or their regular federal tax liability, which is federal taxable income x 21.0% federal corporate tax rate. Corporations are entitled to a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax exceeds the CAMT.
Beginning in 2023, based on the existing statue, Exelon and each of the Utility Registrants will be subject to and will report the CAMT on a separate Registrant basis in the Consolidated Statements of Operations and Comprehensive Income and the Consolidated Balance Sheets. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent Exelon’s consolidated deferred tax liabilities exceed the minimum tax credit carryforward. Exelon’s deferred tax liabilities are expected to exceed the minimum tax credit carryforward for the foreseeable future and thus no valuation allowance is required.
On September 12, 2024, the U.S. Treasury issued proposed regulations providing further guidance addressing the implementation of CAMT. The proposed regulations are consistent with Exelon’s prior interpretation and therefore there are no financial statement impacts. Exelon will continue to monitor and assess the potential financial statement impacts of final regulations or other guidance when issued.
On September 30, 2025, the U.S. Treasury issued interim guidance addressing the implementation of CAMT in the form of a notice. The guidance allows entities with regulated operations a repairs adjustment for CAMT purposes, however the provision was drafted in a manner that does not achieve that intended result. Thus, the guidance does not benefit Exelon and has no financial statement impact. Exelon will continue to monitor and assess the potential financial statement impacts of future regulations or other guidance when issued.
Allocation of Income Taxes to Regulated Utilities (All Registrants)
In Q2 2024, the IRS issued a series of PLRs, to another taxpayer, providing guidance with respect to the application of the tax normalization rules to the allocation of consolidated tax benefits among the members of a consolidated group associated with NOLC for ratemaking purposes. The rulings provide that for ratemaking purposes the tax benefit of NOLC should be reflected on a separate company basis not taking into consideration the utilization of losses by other affiliates. A PLR issued to another taxpayer may not be relied on as precedent.
For the Registrants, except for PECO, the methodology prescribed by the IRS in these PLRs could result in a material reduction of the regulatory liability established for EDITs arising from the TCJA corporate tax rate change that are being amortized and flowed through to customers as well as a reduction in the accumulated deferred income taxes included in rate base for ratemaking purposes. The Utility Registrants, except for PECO, filed PLR requests with the IRS confirming the treatment of the NOLC for ratemaking purposes. The Utility Registrants will record the impact, if any, upon receiving the PLR from the IRS.
One Big Beautiful Bill Act (All Registrants)
On July 4, 2025, the OBBBA was signed into law. The bill permanently extends expiring tax benefits of the TCJA and provides additional tax relief for individuals and businesses while accelerating the phase-out and curtailment
of certain renewable energy tax credits enacted by the IRA. The tax law changes enacted as part of OBBBA will not have a direct material impact on the Registrants’ financial statements.
Long-Term Marginal State Income Tax Rate (All Registrants)
Quarterly, Exelon reviews and updates its marginal state income tax rates for material changes in state tax laws and state apportionment. The Registrants remeasure their existing deferred income tax balances to reflect the changes in marginal rates, which results in either an increase or a decrease to their net deferred income tax liability balances. Utility Registrants record corresponding regulatory liabilities or assets to the extent such amounts are probable of settlement or recovery through customer rates and an adjustment to income tax expense for all other amounts. In the third quarter of 2023, Exelon updated its marginal state income tax rates for changes in state apportionment. The changes in marginal rates in the third quarter resulted in a decrease of $54 million to the deferred tax liability at Exelon, and a corresponding adjustment to income tax expense, net of federal taxes. There were no impacts to ComEd, BGE, PHI, Pepco, DPL, and ACE for the year ended December 31, 2023. There were no impacts to Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE for the years ended December 31, 2025 and 2024.
| December 31, 2025 | Exelon | ||||
| Decrease to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | $ | — | |||
| December 31, 2024 | |||||
| Decrease to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | — | ||||
| December 31, 2023 | |||||
| Decrease to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | (54) | ||||
Allocation of Tax Benefits (All Registrants)
The Utility Registrants are party to an agreement with Exelon and other subsidiaries of Exelon that provides for the allocation of consolidated tax liabilities and benefits (Tax Sharing Agreement). The Tax Sharing Agreement provides that each party is allocated an amount of tax similar to that which would be owed had the party been separately subject to tax. In addition, any net federal and state benefits attributable to Exelon are reallocated to the other Registrants. That allocation is treated as a contribution from Exelon to the party receiving the benefit.
The following table presents the allocation of tax benefits from Exelon under the Tax Sharing Agreement, for the year ended December 31, 2025, 2024, and 2023.
| ComEd | PECO | BGE | PHI | Pepco | DPL | ACE | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | 20 | $ | 14 | $ | 12 | $ | 23 | $ | 12 | $ | 7 | $ | 4 | |||||||||||||||||||||||||||
| December 31, 2024 | 30 | 15 | 14 | 16 | 9 | 5 | 2 | ||||||||||||||||||||||||||||||||||
December 31, 2023(a) | 13 | 19 | — | 10 | 4 | — | 2 | ||||||||||||||||||||||||||||||||||
(a)BGE and DPL did not record an allocation of federal tax benefits from Exelon under the Tax Sharing Agreement as a result of a tax net operating loss.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2018 | Feb 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.