F&G Annuities & Life, Inc.FG
F&G Annuities & Life, Inc. Income Taxes Disclosure
Income Taxes
We adopted Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, as of December 31, 2025 using the prospective approach. Refer to Note T - Recent Accounting Pronouncements for further information.
Income from continuing operations before income tax consists of the following (in millions):
| Year Ended December 31, | |||||
| 2025 | |||||
| Pretax income (loss): | |||||
| United States | $ | 323 | |||
| Outside the United States | $ | — | |||
| Total pretax income | $ | 323 | |||
Income tax expense (benefit) on continuing operations consists of the following (in millions):
| Year Ended December 31, | |||||
| 2025 | |||||
| Current | |||||
| Federal | $ | (51) | |||
| Foreign | — | ||||
| State | 4 | ||||
| Total Current | (47) | ||||
| Deferred | |||||
| Federal | 99 | ||||
| Foreign | — | ||||
| State | — | ||||
| Total Deferred | 99 | ||||
| Total | $ | 52 | |||
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Current | $ | 65 | $ | 27 | |||||||
| Deferred | 71 | (4) | |||||||||
| Total | $ | 136 | $ | 23 | |||||||
Total income tax expense (benefit) was allocated as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Taxes on net earnings from continuing operations | $ | 52 | $ | 136 | $ | 23 | |||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Changes in current discount rate - future policy benefits | (62) | 59 | (50) | ||||||||||||||
| Changes in instrument-specific credit risk-market benefits | (6) | 1 | (9) | ||||||||||||||
| Unrealized (loss) gain on investments and other financial instruments | 174 | (41) | 275 | ||||||||||||||
| Unrealized gain (loss) on foreign currency translation and cash flow hedging | 2 | (1) | 1 | ||||||||||||||
| Total income tax (benefit) expense allocated to other comprehensive income (loss) | 108 | 18 | 217 | ||||||||||||||
| Total income taxes | $ | 160 | $ | 154 | $ | 240 | |||||||||||
A reconciliation of the federal statutory rate to our effective tax rate is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| US Federal statutory rate | $ | 68 | 21.0 | % | |||||||
| State and local income taxes, net of federal income tax effect (a) | 3 | 1.0 | |||||||||
| Foreign tax effect | — | — | |||||||||
| Effect of changes in tax laws or rates enacted in the current period | — | — | |||||||||
| Effect of cross border tax laws | |||||||||||
| Foreign Tax Credit | (1) | (0.4) | |||||||||
| Tax credits | |||||||||||
| Low income housing tax credits | (9) | (2.8) | |||||||||
| Research and development credits | (1) | (0.3) | |||||||||
| Other | — | — | |||||||||
| Changes in valuation allowance | (4) | (1.3) | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Dividend received deduction | (2) | (0.6) | |||||||||
| Officers compensation | 7 | 2.1 | |||||||||
| Stock compensation | (1) | (0.4) | |||||||||
| COLI | (7) | (2.1) | |||||||||
| Other | (1) | (0.3) | |||||||||
| Change in unrecognized tax benefit | — | — | |||||||||
| Other adjustments | — | — | |||||||||
| Reported income tax expense/(benefit) | $ | 52 | 15.9 | % | |||||||
(a)For 2025, state taxes in Iowa, Florida, and New Jersey contributed to the majority of the tax effect in this category.
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal benefit | 0.3 | (12.7) | |||||||||
| Benefit for capital loss carryback | — | — | |||||||||
| Officers Compensation | 1.2 | (11.2) | |||||||||
| Stock compensation | (0.8) | 2.7 | |||||||||
| Tax credits | (1.6) | 16.2 | |||||||||
| Dividends received deduction | (0.2) | 7.9 | |||||||||
| Valuation allowance for deferred tax assets | (1.8) | (100.1) | |||||||||
| COLI | (0.6) | 13.2 | |||||||||
| Non-deductible expenses and other, net | — | (3.2) | |||||||||
| Effective tax rate | 17.5 | % | (66.2) | % | |||||||
For the year ended December 31, 2025, the Company’s effective tax rate was 15.9%. The effective tax rate was positively impacted by favorable permanent adjustments, including low income housing tax credits (“LIHTC”), the dividends received deduction (“DRD”), and COLI, as well as the valuation allowance release on unrealized losses and capital loss carryforwards.
For the year ended December 31, 2024, the Company’s effective tax rate was 17.5%. The effective tax rate was positively impacted by favorable permanent adjustments, including LIHTC, DRD, and COLI, as well as the valuation allowance release on unrealized losses and capital loss carryforwards.
For the year ended December 31, 2023, the Company’s effective tax rate was (66.2)%. The effective tax rate was negatively impacted by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards.
The significant components of deferred tax assets and liabilities consist of the following (in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Employee benefit accruals | $ | 30 | $ | 29 | |||||||
| Net operating loss carryforwards | 106 | 105 | |||||||||
| Accrued liabilities | 8 | — | |||||||||
| General business tax credits | 117 | 9 | |||||||||
| Corporate Alternative Minimum Tax ("CAMT") Credit Carryforwards | 7 | 155 | |||||||||
| Bermuda CIT NOL Carryforward | — | 10 | |||||||||
| Investment securities | 466 | 643 | |||||||||
| Capital loss carryover | — | 19 | |||||||||
| Market risk benefit | 99 | 56 | |||||||||
| Derivatives | — | 18 | |||||||||
| Life insurance and claim related adjustments | 539 | 451 | |||||||||
| Section 263a Costs | 30 | — | |||||||||
| Funds held under reinsurance agreements | 1,178 | 822 | |||||||||
| Other | 14 | 13 | |||||||||
| Total gross deferred tax asset | 2,594 | 2,330 | |||||||||
| Less: valuation allowance | 38 | 58 | |||||||||
| Total deferred tax asset | 2,556 | 2,272 | |||||||||
| Deferred Tax Liabilities: | |||||||||||
| Amortization of goodwill and intangible assets | (13) | (18) | |||||||||
| Other | (7) | (2) | |||||||||
| Depreciation | (7) | (11) | |||||||||
| Partnerships | (211) | (163) | |||||||||
| Value of business acquired | (251) | (283) | |||||||||
| Derivatives | (47) | — | |||||||||
| Deferred acquisition costs | (677) | (543) | |||||||||
| Transition reserve on new reserve method | — | (8) | |||||||||
| Funds held under reinsurance agreements | (1,261) | (945) | |||||||||
| Total deferred tax liability | (2,474) | (1,973) | |||||||||
| Net deferred tax asset (liability) | $ | 82 | $ | 299 | |||||||
Our net deferred tax asset was $82 million as of December 31, 2025 and a net deferred tax asset of $299 million as of December 31, 2024. The significant changes in the deferred taxes are as follows: the deferred tax asset for investment securities decreased by $177 million, primarily due to unrealized gains on fixed maturities. The deferred tax liability related to deferred acquisition costs increased by $134 million, which is consistent with the growth in sales in our U.S. life group. The life insurance reserves and claim related adjustments deferred tax asset increased by $88 million primarily due to the GAAP reserves for the year increasing by more than the tax reserves. The reinsurance receivable deferred tax asset increased by $356 million, and the reinsurance receivable deferred tax liability increased by $316 million, both due to the increase in modified coinsurance reinsurance. The deferred tax related to Derivatives decreased by $65 million due to unrealized gains on call options, interest rate swaps, and embedded derivatives.The deferred tax liability related to partnerships increased by $48 million, primarily attributable to unrealized gains.
As of December 31, 2025, we have net operating losses (“NOLs”) on a pretax basis of $506 million, which are available to carryforward and offset future federal taxable income subject to the 80% taxable income limitation. None of these NOLs are subject to Internal Revenue Code Section 382 limitations and these losses do not expire.
As of December 31, 2025 and 2024, we had $117 million and $9 million of general business tax credits, respectively, which expire between 2041 and 2045. None of the $117 million in tax credits are limited. As of
December 31, 2025 and 2024, the Company also had $7 million and $155 million of CAMT credits. The CAMT credits are not limited by IRC Section 382, and have no expiration date.
As of December 31, 2025, the valuation allowance of $38 million consisted of a full valuation allowance of $1 million on the unrealized capital loss deferred tax assets for F&G Life Re Ltd. (“F&G Life Re”), F&G Cayman Re Ltd. (“F&G Cayman Re”), and the US Non-life Companies, a full valuation allowance of $1 million on the foreign deferred tax assets of F&G Life Re, a full valuation allowance of $8 million on the deferred capital loss carryforwards for the US Non-life Companies and F&G Cayman Re, and a partial valuation allowance of $28 million on the US Life Companies’ capital loss deferred tax assets.
Income taxes paid (net of refunds received) consist of the following (in millions):
| Year Ended December 31, | |||||
| 2025 | |||||
| Income Taxes Paid | |||||
| Federal | $ | 6 | |||
| Foreign | — | ||||
| State | |||||
| Iowa | 1 | ||||
| Florida | 1 | ||||
| New York | — | ||||
| Other | 1 | ||||
| Total | $ | 9 | |||
The Company makes certain investments in limited partnerships, which invest in affordable housing projects that qualify for the LIHTC. The Company’s investment in the funds is amortized through income tax expense on the Consolidated Statements of Operations using the proportional amortization method.
The tax credits and other benefits recognized are included in the net change in income taxes on the Consolidated Statements of Cash Flows. The following table presents the impacts of the LIHTC investments included in income tax expense on the Consolidated Statements of Operations (in millions):
| For the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Tax credits and other benefits recognized | $ | $ | $ | ||||||||||||||
| Tax credit amortization expense | |||||||||||||||||
| Total | $ | (9) | $ | (10) | $ | (5) | |||||||||||
At December 31, 2025 and December 31, 2024, LIHTC investments included in Prepaid expenses and other assets on the Consolidated Balance Sheets totaled $ and $, respectively.
The U.S. Life insurance group is subject to a Tax Sharing Agreement within the members of the life insurance tax return group. The agreement provides for an allocation based on separate return calculations and allows for reimbursement of company tax benefits absorbed by other members of the group. The U.S. non-life group is subject to a Tax Sharing Agreement with its parent, FNF, with which it files a consolidated federal income tax return. The Company’s non-life group Tax Sharing Agreement allows for reimbursement of company tax benefits absorbed by FNF. If, during the year ended December 31, 2025, the Company had computed taxes using the separate return method, the pro-forma provision for income taxes would remain unchanged. The tax sharing agreement with FNF will not be applicable after 2025. There will be a settlement once the final tax return is filed, but our tax attributes might still be impacted by amended returns or carrybacks involving open years.
The U.S. Federal income tax returns of the Company for years prior to 2020 are no longer subject to examination by the taxing authorities. The Company does not have any unrecognized tax benefits (“UTBs”) at
December 31, 2025 or December 31, 2024. In the event the Company has UTBs, interest and penalties related to uncertain tax positions would be recorded as part of income tax expense in the financial statements. The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its tax reserves based on new information or developments.
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law on August 16, 2022. Among other changes, the Inflation Reduction Act introduced a 15% CAMT on adjusted financial statement income and a 1% excise tax on treasury stock repurchases. These provisions were effective January 1, 2023. For purposes of calculating the adjusted financial statement income, the Company is included in the controlled group of FNF, its parent company. Though the Company is subject to the minimum tax, the Company does not expect to be in a perpetual CAMT position. On September 30, 2025, the Internal Revenue Service issued Notice 2025-46 which allows the Company to calculate its CAMT on a consolidated basis with FNF without regard to the five-taxable-year-limitation. The Company applied this Notice 2025-46 to its 2024 tax return and plans to amend its 2023 return to apply the Notice 2025-46. The CAMT was reduced by $27 million and $114 million for 2023 and 2024 respectively. Beginning in 2026, the Company will not be eligible to file a consolidated return with FNF, but CAMT would be calculated with all F&G entities without regard to the five-taxable-year limitation. The Company has elected to consider the effects of CAMT separately in evaluating the need for a valuation allowance. For the year ended December 31, 2025, no valuation allowance is needed. For the year ended December 31, 2025, the Company was not in a CAMT position. A CAMT credit carryforward created in 2024 is expected to be able to be utilized in future years.
The CIT Act of 2023 was passed in Bermuda on December 27, 2023. The CIT commenced on January 1, 2025 and applies a statutory rate of 15% to the taxable income or loss of Bermuda tax resident entities and permanent establishments. F&G Life Re, a 953(d) company with no or minimal US permanent tax differences, is not expected to owe any Bermuda CIT due to the foreign tax credit. The deferred tax asset recorded for the year ended December 31, 2025 of $1 million has a full valuation allowance. Since the CIT did not have any material impact to the financial statements, the deferred tax asset and offsetting valuation allowance were netted together in the rate reconciliation above.
On July 4, 2025, Public Law 119-21, commonly referred to as the One Big Beautiful Bill Act, was signed into law. The accounting consequences of a change in tax law are required to be recognized in the period legislation is enacted. The Company evaluated the provisions of this legislation and incorporated the effects into our 2025 financial statements, which were not material. We will continue to monitor developments related to the legislation.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 27, 2023 | |
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.