JETBLUE AIRWAYS CORPJBLU
JETBLUE AIRWAYS CORP Income Taxes Disclosure
Income Taxes
Our income tax benefit (expense) consisted of the following for the years ended December 31 (in millions):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | $ | 158 | $ | 93 | $ | 43 | ||||||||||||||
| State | 25 | 28 | 6 | |||||||||||||||||
| Foreign | — | (11) | (22) | |||||||||||||||||
| Deferred income tax benefit | 183 | 110 | 27 | |||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | — | — | 1 | |||||||||||||||||
| State | (3) | — | 1 | |||||||||||||||||
| Foreign | (8) | (8) | (5) | |||||||||||||||||
| Current income tax expense | (11) | (8) | (3) | |||||||||||||||||
| Total income tax benefit | $ | 172 | $ | 102 | $ | 24 | ||||||||||||||
On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act permits net operating loss ("NOL") carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. As of December 31, 2025, the Company has filed an application for refund.
Our income tax benefit reconciles to the amount computed below by applying the U.S. federal statutory income tax rate to our loss before income taxes for the years ended December 31 as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Income tax benefit at statutory rate | $ | 163 | 21.0 | % | $ | 188 | 21.0 | % | $ | 70 | 21.0 | % | |||||||||||||||||
| State income tax, net of federal benefit (a) | |||||||||||||||||||||||||||||
| New York City | 12 | 1.6 | % | 13 | 1.5 | % | 4 | 1.2 | % | ||||||||||||||||||||
| Other states | 11 | 1.4 | % | 15 | 1.7 | % | 3 | 0.9 | % | ||||||||||||||||||||
| Foreign income tax effects | |||||||||||||||||||||||||||||
| Puerto Rico | |||||||||||||||||||||||||||||
| Changes in valuation allowance | 105 | 13.6 | % | (15) | (1.7) | % | (4) | (1.2) | % | ||||||||||||||||||||
| Tax holiday | (61) | (7.9) | % | — | — | % | — | — | % | ||||||||||||||||||||
| Other | — | — | % | 11 | 1.2 | % | (4) | (1.2) | % | ||||||||||||||||||||
| Other Foreign Countries | (8) | (1.0) | % | (20) | (2.2) | % | (37) | (11.1) | % | ||||||||||||||||||||
| Tax Credits | |||||||||||||||||||||||||||||
| Tax holiday | (44) | (5.7) | % | — | — | % | — | — | % | ||||||||||||||||||||
| Other | (1) | (0.1) | % | 3 | 0.3 | % | 22 | 6.6 | % | ||||||||||||||||||||
| Changes in valuation allowances | 11 | 1.4 | % | (87) | (9.7) | % | (15) | (4.2) | % | ||||||||||||||||||||
| Nontaxable or nondeductible items | (12) | (1.6) | % | (13) | (1.5) | % | (14) | (4.5) | % | ||||||||||||||||||||
| Other, net | (4) | (0.4) | % | 7 | 0.7 | % | (1) | (0.3) | % | ||||||||||||||||||||
| Total income tax benefit | $ | 172 | 22.3 | % | $ | 102 | 11.3 | % | $ | 24 | 7.2 | % | |||||||||||||||||
(a) The majority (greater than 50%) of state and local income tax impact relates to New York City and New York State.
During 2025 the government of Puerto Rico granted a tax holiday that exempts the Company from income tax in Puerto Rico for a period of 15 years. The tax holiday is renewable indefinitely based on a simple administrative procedure, and management intends to renew the tax holiday for the foreseeable future. As a result, we have removed the deferred tax attributes and valuation allowance related to Puerto Rico from the Company's income tax reporting.
The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):
| 2025 | 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
| Deferred revenue/gains | $ | 262 | $ | 242 | ||||||||||
| Employee benefits | 105 | 106 | ||||||||||||
| Foreign tax credit | — | 44 | ||||||||||||
| Other credits | 14 | 13 | ||||||||||||
| Net operating loss carryforward | 1,218 | 1,082 | ||||||||||||
| Interest expense limitation carryforward | 181 | 110 | ||||||||||||
| Operating lease liabilities | 240 | 145 | ||||||||||||
| Rent expense | 4 | 12 | ||||||||||||
| Capital loss carryforward | 110 | 125 | ||||||||||||
| Sec. 174 research activities | 38 | 34 | ||||||||||||
| Other | 17 | 18 | ||||||||||||
| Total deferred tax assets | 2,189 | 1,931 | ||||||||||||
| Valuation allowance | (133) | (238) | ||||||||||||
| Deferred tax assets, net | 2,056 | 1,693 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Property and equipment | (2,233) | (2,168) | ||||||||||||
| Operating lease assets | (227) | (131) | ||||||||||||
| Other | (43) | (27) | ||||||||||||
| Total deferred tax liabilities | (2,503) | (2,326) | ||||||||||||
| Net deferred tax liability | $ | (447) | $ | (633) | ||||||||||
As of December 31, 2025, we have total tax effected NOL carryforwards of $1.2 billion. The federal NOLs of $1 billion have an indefinite life. We also have state and foreign NOLs of $183 million and $9 million, respectively, from various taxing jurisdictions which, if go unused will start to expire in 2026 through 2045. Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods.
In evaluating the realizability of the deferred tax assets, we assess whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. We consider, among other things, the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. At December 31, 2025, we provided a $133 million valuation allowance to reduce the deferred tax assets to an amount that we consider is more likely than not to be realized. Of the total valuation allowance, $9 million relates to foreign NOL carryforward that begins to expire in 2026, $14 million relates to state NOL carryforward that begins to expire in 2026, and $110 million relates to capital loss carryforwards.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Unrecognized tax benefits at January 1, 2025 | $ | 31 | $ | 25 | $ | 26 | ||||||||||||||
| Increases for tax positions taken during the period | 1 | 8 | — | |||||||||||||||||
| Decreases for tax positions taken during the period | (2) | (1) | (5) | |||||||||||||||||
| Increases for tax positions taken during a prior period | — | — | 5 | |||||||||||||||||
| Decreases for tax positions taken during a prior period | (1) | (1) | (1) | |||||||||||||||||
| Unrecognized tax benefits December 31, 2025 | $ | 29 | $ | 31 | $ | 25 | ||||||||||||||
Interest and penalties accrued on unrecognized tax benefits were not significant. If recognized, $9 million of the unrecognized tax benefits as of December 31, 2025 would impact our effective tax rate. We do not expect any significant change in the amount of the unrecognized tax benefits within the next 12 months. As a result of net operating losses and statute of limitations in our major tax jurisdictions, years 2016 through 2020 remain subject to examination by the relevant tax authorities.
A reconciliation of the income taxes paid (net of refunds) is as follows (in millions) for the year ended December 31, 2025:
| Jurisdiction | Income Taxes Paid (net of refunds) | ||||
| U.S. Federal | $ | (1) | |||
| NYC | (5) | ||||
| Other State | — | ||||
| Dominican Republic | 7 | ||||
| Haiti | 1 | ||||
| Puerto Rico | (4) | ||||
| Other Foreign | — | ||||
| Total | $ | (2) | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 17, 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.