Flywire Corp Income Taxes Disclosure

Note 16. Income Taxes

During the years ended December 31, 2025 and 2023, the Company recorded an income tax provision of $7.9 million and $4.2 million, respectively, and for the year ended December 31, 2024, the Company recorded an income tax benefit of $1.0 million, which is primarily attributable to foreign activity and U.S. state taxes. The $1.0 million income tax benefit for the year ended December 31, 2024, also reflected a release of a portion of the U.S. valuation allowance due to deferred tax liabilities recorded as part of the Invoiced acquisition.

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 ("OBBBA") which includes, among other provisions, changes to the U.S. corporate income tax system. These changes are generally effective for tax years beginning after December 31, 2025, except for changes related to the immediate expensing of research and development expenditures, including ability to deduct 100% or 50% (over 2 years) of unamortized domestic research and experimental expenditures, and the reinstatement of 100% bonus depreciation, which were retroactively effective for tax years beginning after December 31, 2024 and for property placed in service after January 19, 2025, respectively. The changes that were retroactively enacted were reflected in the income tax provision for the year ended December 31, 2025 and did not have a material effect on our financial statements. The Company will continue to assess the changes effective for tax years beginning after December 31, 2025, but does not expect such changes will have a material effect on our financial statements in future periods.

As of December 31, 2025, the Company had gross federal and state net operating loss (“NOL”) carryforwards of $48.1 million and $81.6 million, respectively, out of which $2.4 million of federal NOL carryforwards and $81.6 million of state NOL carryforwards both begin to expire in 2031. Additionally, $45.7 million of federal NOL carryforwards have indefinite lives. As of December 31, 2025, the Company has gross foreign NOL carryforwards of $1.5 million which have indefinite lives. The federal, state, and foreign NOL carryforwards may be available to reduce future federal, state, and foreign taxable income, respectively.

As of December 31, 2025, the Company had federal and state research and development tax credit carryforwards of $8.7 million and $0.3 million, respectively, which begin to expire in 2040 and 2028, respectively. The federal and state research and development tax credit carryforwards may be available to reduce future federal and state tax, respectively.

Ownership changes, as defined under Internal Revenue Code Section 382, and similar state provisions may limit the amount of federal and state NOL and credit carryforwards that can be utilized annually to offset future federal and state taxable income and tax. Generally, an ownership change occurs when the ownership percentage of 5% or greater stockholders increases by more than 50% over a three-year period. Accordingly, the purchase of the Company’s stock in amounts greater than specified levels could limit the Company’s ability to utilize federal and state NOL and credit carryforwards for tax purposes. During 2022, the Company completed a Section 382 study and as a result of the ownership changes identified, $1.6 million of Flywire’s NOLs and $0.2 million of Simplificare Inc.’s NOLs will expire unutilized, assuming sufficient taxable income is generated in the future. The Company updated its Section 382 study through the 2024 tax year, and determined there are no additional limitations in using federal and state NOL and credit carryforwards. The Company does not believe an ownership change within the meaning of Sections 382 and 383 has occurred through December 31, 2025. Therefore, the Company does not believe that its NOLs and credit carryforwards are limited or that any of its carryforwards would expire unused. The Company expects to refresh its Section 382 study in 2026.

In assessing the realizability of its deferred tax assets, the Company considered whether it was more likely than not that some portion or all of the deferred tax assets would not be realized. The realization of deferred tax assets depends upon the generation of future taxable income. The Company has evaluated the positive and negative evidence bearing upon the realizability and determined that it is more likely than not that the Company will not realize the benefits of the deferred tax assets, and as a result, the Company continues to maintain a valuation allowance against federal, state and certain foreign deferred tax assets as of December 31, 2025 and 2024. The Company will continue to maintain a full

valuation allowance on its deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance. The Company believes that there is a reasonable possibility that sufficient positive evidence may become available to reach a conclusion that a portion of the valuation allowance may no longer be needed in the foreseeable future. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company is able to actually achieve.

During the year ended December 31, 2025, the Company recorded a net decrease in the valuation allowance of $5.0 million, which is primarily due to deferred tax liabilities as a result of tax deductible goodwill as part of the Sertifi acquisition and NOL utilization. During the year ended December 31, 2024, the Company recorded a net increase in the valuation allowance of $3.7 million, which is primarily due to an increase of $4.8 million related to capitalized research and development costs and $7.0 million research and development tax credit carryforwards as a result of research and development study conducted during 2024, offset by a valuation allowance release of $1.0 million in a foreign jurisdiction and $4.9 million release of valuation allowance against deferred tax liabilities acquired in the Invoiced acquisition. During the year ended December 31, 2023, the Company recorded a net increase in the valuation allowance of $2.8 million, which is primarily due to an increase of $12.1 million related to capitalized research and development costs, offset by NOL utilization in the U.S. and the U.K. Changes in the valuation allowance are summarized as follows (in thousands):

The Company permanently reinvests its excess book over tax outside basis differences, including unremitted earnings and cumulative translation adjustments, of its foreign subsidiaries. No income taxes have been provided on such outside basis differences at December 31, 2025. Any permanently reinvested outside basis differences could reverse if we make distributions, sell our foreign subsidiaries or various other events occur, none of which were considered probable as of December 31, 2025. As of December 31, 2025, the amount of the unrecognized deferred income taxes related to such outside basis difference would not be material to our financial statements.

As of December 31, 2025, 2024, and 2023, the Company accrued $1.3 million, $1.3 million, and $0.8 million related to reserves for uncertain tax positions, inclusive of interest and penalties, respectively. This includes potential tax benefits of $0.3 million, $1.0 million, and $0.5 million, respectively, that, when recognized, would impact the effective tax rate. As of December 31, 2025, $1.0 million of the reserve for uncertain tax positions is reflected as a reduction to deferred taxes and the remaining balance is recorded as a component of other liabilities in the consolidated balance sheet.

The Company did not recognize any accrued interest and penalties for the years ended December 31, 2025, 2024, and 2023 related to the reserves for uncertain tax positions in the income tax provision. Included in the total reserve for uncertain tax positions are accrued interest and penalties of $0.1 million, $0.2 million, and $0.2 million at December 31, 2025, 2024, and 2023, respectively.

The Company files income tax returns as prescribed by the tax laws of the jurisdiction in which it operates. In the normal course of its business, the Company is subject to examination by federal, state and foreign jurisdictions, where applicable. The Company is open to future federal tax examinations by the Internal Revenue Service from 2022 to the present; however, carryforward attributes that were generated prior to 2022 may still be adjusted upon examination to the

extent they will be used in a future period. The Company remains open to examination by other foreign tax authorities from 2021 to the present.