GENERAL ELECTRIC COGE
GENERAL ELECTRIC CO Income Taxes Disclosure
INCOME TAXES. GE Aerospace files a consolidated U.S. federal income tax return which enables the company to use tax deductions and credits of one member of the group to reduce the tax that otherwise would have been payable by another member of the group. The effective tax rate reflects the benefit of these tax reductions in the consolidated return. Cash payments are made within the company for tax increases or reductions.
(a) Primarily related to utilization of losses against capital gains, including gains reported in discontinued operations. See Note 2 for further information.
Our businesses are subject to a wide variety of U.S. federal, state and foreign tax laws, regulations and policies. Changes to these laws or regulations may affect our tax liability, return on investments and business operations. On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law in the U.S., which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation and repeal of non-U.S. corporations' fiscal year end. Some impacts of the OBBBA will not be realized until 2026 and forward, such as a more favorable tax rate on Foreign-Derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC Tested Income). In 2025, we incurred $131 million of tax expense in connection with OBBBA. Due to the nature of the tax law changes, the company has not realized an impact in the Statement of Operations related to deferred taxes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury.
As members of the OECD (Organisation for Economic Co-operation and Development) over 140 countries have agreed in principle to a global minimum tax of 15% of reported profits (Pillar 2). The OECD have published model rules on Pillar 2. Many countries have now incorporated Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. In January 2025, the U.S. issued an executive order announcing opposition to aspects of these rules. In June 2025, the G7 countries agreed that U.S. Multi-National Entities (MNEs) should be excluded from certain aspects of the Pillar 2 global minimum tax rules (the G7 Statement) in exchange for the U.S. not imposing retaliatory taxes. On January 5, 2026, the OECD/G20 announced the Side-by-Side (SbS) package, implemented as administrative guidance and modifying the operation of Pillar 2 rules. The package introduces simplifications and new safe harbors for U.S. and other multinational companies where domestic and international tax systems meet robust requirements to coexist with Pillar 2 which would fully exempt U.S.-parented groups from the application of two of the three Pillar 2 top up taxes. The SbS package also extends the current Transitional Country-by-Country Reporting (CbCR) Safe Harbor by one year, through the end of fiscal year of 2027. We continue to refine the effective tax rate and cash tax impact for Pillar 2 in light of legislative changes in multiple countries. During 2025, we have incurred $129 million of tax expenses in connection with the incorporation of the Pillar 2 model rules, which we have considered as part of the effective tax rate.
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 2025 | 2024 | 2023 | ||||||||
| U.S. income (loss) | $ | 6,659 | $ | 4,809 | $ | 7,195 | |||||
| Non-U.S. income (loss) | 3,341 | 2,811 | 3,246 | ||||||||
| Total | $ | 10,000 | $ | 7,620 | $ | 10,441 | |||||
| INCOME TAX PAYMENTS | 2025 | ||||
| U.S. Federal(a) | $ | 150 | |||
| U.S. State(a) | 7 | ||||
| Non-U.S: | |||||
| Singapore | 178 | ||||
| United Kingdom | 78 | ||||
| Ireland | 60 | ||||
| Hungary | 52 | ||||
| Italy | 46 | ||||
| India | 36 | ||||
| Other Non-U.S. | 132 | ||||
| Total income taxes paid (received), continuing operations | $ | 739 | |||
(a) Includes the benefit of the OBBBA.
For the year ended December 31, 2025, income taxes paid (received) in discontinued operations was $(154) million.
Income taxes paid were $852 million and $994 million for the years ended December 31, 2024 and 2023, respectively, including payments reported in discontinued operations.
| PROVISION (BENEFIT) FOR INCOME TAXES | 2025 | 2024 | 2023 | ||||||||
| Current | |||||||||||
| U.S. Federal | $ | 671 | $ | 310 | $ | (588) | |||||
| Non-U.S. | 709 | 423 | 314 | ||||||||
| U.S. State | (72) | 48 | 134 | ||||||||
| Deferred | |||||||||||
| U.S. Federal | (35) | 250 | 622 | ||||||||
| Non-U.S. | 32 | 59 | 453 | ||||||||
| U.S. State | 100 | (128) | 59 | ||||||||
| Total | $ | 1,405 | $ | 962 | $ | 994 | |||||
| RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO EFFECTIVE INCOME TAX RATE | 2025 | |||||||
| Amount | Rate | |||||||
| U.S. federal statutory income tax rate | $ | 2,100 | 21.0 | % | ||||
| State and local income taxes, net of federal income tax effect(a) | 74 | 0.7 | % | |||||
| Foreign tax effects: | ||||||||
| Singapore | ||||||||
| Statutory rate difference between foreign and U.S. | (70) | (0.7) | % | |||||
| Local taxes at a rate different than the statutory rate(b) | (37) | (0.4) | % | |||||
| Other | 53 | 0.5 | % | |||||
| Other foreign jurisdictions | 68 | 0.7 | % | |||||
| Effect of cross-border tax laws | ||||||||
| Foreign-derived intangible income | (338) | (3.4) | % | |||||
| Other | 7 | 0.1 | % | |||||
| Tax credits | ||||||||
| Energy-related tax credits | (213) | (2.1) | % | |||||
| R&D credit | (354) | (3.5) | % | |||||
| Change in valuation allowances | (91) | (0.9) | % | |||||
| Nontaxable or nondeductible items | (54) | (0.5) | % | |||||
| Changes in unrecognized tax benefits | 258 | 2.6 | % | |||||
| Other adjustments | 2 | — | % | |||||
| Effective income tax rate | $ | 1,405 | 14.1 | % | ||||
(a) State and local taxes in FL, MA, KS, TN and CA comprise the majority of this category.
(b) The tax expense (benefit) related to the negotiated tax rate in Singapore was reduced by $121 million of the global minimum tax under Pillar 2.
Below is a tabular rate reconciliation previously disclosed for the year ended December 31, 2024 and 2023.
| RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO EFFECTIVE INCOME TAX RATE | 2024 | 2023 | |||||||||||||||
| Amount | Rate | Amount | Rate | ||||||||||||||
| U.S. federal statutory income tax rate | $ | 1,600 | 21.0 | % | $ | 2,193 | 21.0 | % | |||||||||
| State Taxes, net of federal benefit | 123 | 1.6 | 152 | 1.5 | |||||||||||||
| Tax on global activities including exports(a) | (92) | (1.2) | 78 | 0.7 | |||||||||||||
| U.S. business credits(b) | (242) | (3.2) | (254) | (2.4) | |||||||||||||
| Retained and sold ownership interests | (110) | (1.4) | (1,215) | (11.6) | |||||||||||||
| All other – net(c) | (317) | (4.2) | 40 | 0.3 | |||||||||||||
| (638) | (8.4) | (1,199) | (11.5) | ||||||||||||||
| Effective income tax rate | $ | 962 | 12.6 | % | $ | 994 | 9.5 | % | |||||||||
(a)For the years ended December 31, 2024 and 2023, the tax expense (benefit) related to the negotiated tax rate in Singapore was $(136) million and $(136) million, respectively, and the tax expense (benefit) related to cross-border tax payments and U.S. tax on non-U.S. subsidiaries was $88 million and $121 million, respectively.
(b)Primarily the credit for energy produced from renewable sources from tax equity investments and the credit for research performed in the U.S.
(c)For the years ended December 31, 2024 and 2023, included $(246) million and $35 million, respectively, for separation income tax costs (benefits), of which zero and $38 million was due to the repatriation of previously reinvested net income.
UNRECOGNIZED TAX POSITIONS. Annually, we file over 500 income tax returns in over 200 global taxing jurisdictions. As a multinational with operations around the world, we are under examination in many taxing jurisdictions and in some cases engaged in litigation, including our legacy businesses. The IRS is currently auditing our consolidated U.S. income tax returns for 2016-2020.
A summary and reconciliation of our unrecognized tax benefits are as follows:
UNRECOGNIZED TAX BENEFITS December 31 | 2025 | 2024 | 2023 | ||||||||
| Unrecognized tax benefits | $ | 3,056 | $ | 2,824 | $ | 3,399 | |||||
| Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 2,381 | 2,110 | 2,708 | ||||||||
| Accrued interest on unrecognized tax benefits | 656 | 609 | 635 | ||||||||
| Accrued penalties on unrecognized tax benefits | 11 | 14 | 111 | ||||||||
(a) Some portion of such reduction may be reported as discontinued operations.
| UNRECOGNIZED TAX BENEFITS RECONCILIATION | 2025 | 2024 | 2023 | ||||||||
| Balance at January 1 | $ | 2,824 | $ | 3,399 | $ | 3,951 | |||||
| Additions for tax positions of the current year | 347 | 68 | 109 | ||||||||
| Additions for tax positions of prior years | 93 | 77 | 156 | ||||||||
| Reductions for tax positions of prior years(a) | (168) | (649) | (710) | ||||||||
| Settlements with tax authorities | (30) | (14) | (56) | ||||||||
| Expiration of the statute of limitations | (10) | (57) | (51) | ||||||||
| Balance at December 31 | $ | 3,056 | $ | 2,824 | $ | 3,399 | |||||
(a) Included $(612) million due to the spin of GE Vernova for 2024 and $(577) million due to the spin of GE HealthCare for 2023.
We classify interest on tax deficiencies as interest expense; we classify income tax penalties as provision for income taxes. For the years ended December 31, 2025, 2024 and 2023, we recognized $43 million, $137 million and $28 million, respectively, of related to tax deficiencies. We also recognized $(2) million, an insignificant amount and $7 million of tax expense (income) related to income tax penalties for the years ended December 31, 2025, 2024 and 2023, respectively.
DEFERRED INCOME TAXES. We have not recorded a provision for the deferred taxes related to the U.S. tax on foreign earnings enacted in the Tax Cuts and Jobs Act of 2017 ("global intangible low tax income"). We also have not provided deferred taxes on cumulative net income of non-U.S. affiliates and associated companies that have been reinvested indefinitely. Due to U.S. tax reform, substantially all of our unrepatriated net income have been subject to U.S. tax and accordingly we expect to have the ability to repatriate available non-U.S. cash without significant additional tax cost. Most of these earnings have been reinvested in active non-U.S. business operations and it is not practicable to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. We reassess reinvestment of net income on an ongoing basis. During the fourth quarter of 2025, we incurred $55 million of withholding tax expense associated with the expected repatriation of certain previously reinvested earnings.
The following table presents our net deferred tax assets and net deferred tax liabilities attributable to different tax jurisdictions or different tax paying components.
DEFERRED INCOME TAXES December 31 | 2025 | 2024 | ||||||
| Total assets | $ | 7,883 | $ | 7,479 | ||||
| Total liabilities | (424) | (368) | ||||||
| Net deferred income tax asset (liability) | $ | 7,459 | $ | 7,111 | ||||
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31 | 2025 | 2024 | ||||||
| Deferred tax assets | ||||||||
| Insurance company loss reserves | $ | 2,398 | $ | 2,349 | ||||
| Progress collections, Contract assets, Contract liabilities and deferred items | 1,764 | 1,435 | ||||||
| Accrued expenses and reserves | 1,278 | 1,231 | ||||||
| Deferred expenses | 1,231 | 1,398 | ||||||
| Other compensation and benefits | 580 | 510 | ||||||
| Principal pension plans | 989 | 1,009 | ||||||
| Non-U.S. loss carryforwards(a) | 2,133 | 1,891 | ||||||
| Capital losses carryforward | 881 | 849 | ||||||
| State deferred tax assets(b) | 684 | 762 | ||||||
| Other | 1,522 | 1,514 | ||||||
| Total deferred tax assets | $ | 13,460 | $ | 12,948 | ||||
| Valuation allowance(a)(b)(c) | (3,338) | (3,216) | ||||||
| Total deferred tax assets after valuation allowance | $ | 10,122 | $ | 9,732 | ||||
| Deferred tax liabilities | ||||||||
Intangibles | $ | (1,097) | $ | (1,049) | ||||
Depreciation | (732) | (712) | ||||||
| Investment in securities | (640) | (661) | ||||||
| Other | (194) | (199) | ||||||
| Total deferred tax liabilities | (2,663) | (2,621) | ||||||
| Net deferred income tax asset (liability) | $ | 7,459 | $ | 7,111 | ||||
(a)Included valuation allowances for non-U.S. loss carryforwards of $1,439 million and $1,362 million as of December 31, 2025 and 2024, respectively. The net deferred tax asset as of December 31, 2025 of $694 million relates to net operating losses that may be carried forward indefinitely.
(b) Included valuation allowances for U.S. state losses and credit carryforwards of $479 million and $490 million as of December 31, 2025 and 2024, respectively. Of the $95 million of net deferred tax assets for U.S. state losses and credit carryforwards as of December 31, 2025, $12 million relates to state attributes that expire in various year ending from December 31, 2026 through December 31, 2028, $78 million relates to state attributes that expire various years ending from December 31, 2029 through December 31, 2045, and $5 million relates to state attributes that may be carried forward indefinitely.
(c) Included valuation allowances related to assets other than non-U.S. loss carryforwards and U.S. state loss and credit carryforwards of $1,420 million and $1,364 million as of December 31, 2025 and 2024, respectively, related primarily to excess U.S. federal capital loss and foreign tax credit carryforwards.
DEFERRED TAX ASSETS VALUATION ALLOWANCE | |||||
| Balance at December 31, 2022 | $ | (5,164) | |||
| Additions charged to income tax expense | — | ||||
| Reductions credited to income tax expense | 102 | ||||
| Other adjustments(a) | 1,646 | ||||
| Balance at December 31, 2023 | $ | (3,416) | |||
| Additions charged to income tax expense | (2) | ||||
| Reductions credited to income tax expense | 184 | ||||
| Other adjustments | 18 | ||||
| Balance at December 31, 2024 | $ | (3,216) | |||
| Additions charged to income tax expense | (2) | ||||
| Reductions credited to income tax expense | 71 | ||||
| Other adjustments | (191) | ||||
| Balance at December 31, 2025 | $ | (3,338) | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 29, 2026 | Showing above |
| 2024 | Feb 3, 2025 | |
| 2023 | Feb 2, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 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.