KKR & Co. Inc.KKR
KKR & Co. Inc. Income Taxes Disclosure
INCOME TAXES
KKR & Co. Inc. is a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local
income taxes at the corporate level on its share of taxable income. In addition, KKR Group Partnership and certain of its
subsidiaries operate as partnerships for U.S. federal tax purposes but as taxable entities for certain state, local or non-U.S. tax
purposes. Moreover, certain corporate subsidiaries of KKR, including certain subsidiaries of Global Atlantic, are domestic
corporations for U.S. federal income tax purposes and are subject to U.S. federal, state, and local income taxes.
Income (loss) before income taxes includes the following components:
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Income (Loss) before Income Taxes: | |||||
United States | $6,474,872 | $5,087,745 | $5,614,242 | ||
Foreign | 624,288 | 772,688 | 940,367 | ||
Total Income (Loss) before Income Taxes | $7,099,160 | $5,860,433 | $6,554,609 | ||
The provision (benefit) for income taxes consists of the following:
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Current | |||||
Federal | $1,109,978 | $363,242 | $462,940 | ||
State and Local | 164,258 | 93,925 | 52,480 | ||
Foreign | 204,460 | 188,837 | 108,836 | ||
Subtotal | 1,478,696 | 646,004 | 624,256 | ||
Deferred | |||||
Federal | (554,175) | 249,601 | 447,488 | ||
State and Local | 41,170 | 62,538 | 121,198 | ||
Foreign | (11,943) | (3,747) | 4,581 | ||
Subtotal | (524,948) | 308,392 | 573,267 | ||
Total Income Taxes | $953,748 | $954,396 | $1,197,523 | ||
The following table reconciles the U.S. Federal Statutory Tax Rate to the Effective Income Tax Rate under the ASU
2023-09 guidance on income tax disclosures issued in December 2023 for the year ended December 31, 2025:
Year Ended December 31, 2025 | |||
Amount | Rate (%) | ||
Statutory U.S. Federal Income Tax Rate | $1,490,824 | 21.0% | |
State and Local Income Tax, net of federal income tax effect (1) | 170,290 | 2.4% | |
Foreign Tax Effects | |||
Bermuda | |||
Tax rate differential | 5,698 | 0.1% | |
Foreign tax credits | (71,329) | (1.0)% | |
Other foreign jurisdictions | 45,285 | 0.6% | |
Effect of Changes in Tax Law or Rates (Current) | — | —% | |
Effect of Cross-Border Tax Laws | |||
US tax on foreign insurance company | 88,980 | 1.3% | |
Other | (8,997) | (0.1)% | |
Tax Credits | (4,845) | (0.1)% | |
Change in Valuation Allowances | 4,576 | —% | |
Nontaxable or Nondeductible Items | |||
Income not attributable to KKR & Co. Inc. | (773,246) | (10.9)% | |
Compensation charges borne by KKR Holdings | 73,747 | 1.0% | |
Other | (65,598) | (0.9)% | |
Changes in Unrecognized Tax Benefits | (619) | —% | |
Other Adjustments | (1,018) | —% | |
Effective Income Tax | $953,748 | 13.4% | |
(1)State and local income taxes in California and New York comprise a majority of the state and local income taxes, net of federal income tax effect category.
The following table reconciles the U.S. Federal Statutory Tax Rate to the Effective Income Tax Rate for the years ended
December 31, 2024 and 2023:
December 31, 2024 | December 31, 2023 | ||
Statutory U.S. Federal Income Tax Rate | 21.0% | 21.0% | |
Income not attributable to KKR & Co. Inc. (1) | (15.5)% | (8.8)% | |
Foreign Income Taxes | —% | (0.3)% | |
State and Local Income Taxes | 2.2% | 2.2% | |
Compensation Charges not attributable to KKR & Co. Inc. | 10.1% | 4.9% | |
Change in Valuation Allowance | (1.1)% | —% | |
Non-Deductible Expenses | 1.1% | —% | |
Other | (1.5)% | (0.7)% | |
Effective Income Tax Rate | 16.3% | 18.3% |
(1)Represents primarily income attributable to noncontrolling interests for all periods.
A summary of the tax effects of the temporary differences is as follows:
Asset Management and Strategic Holdings | December 31, 2025 | December 31, 2024 | |
Deferred Tax Assets | |||
Fund Management Fee Credits | $127,591 | $127,006 | |
Equity Based Compensation | 37,246 | 96,476 | |
KKR Holdings Unit Exchanges (1) | 366,250 | 387,836 | |
Depreciation and Amortization | 102,419 | 140,088 | |
Operating Lease Liability | 176,828 | 179,640 | |
Other | 41,536 | 8,248 | |
Total Deferred Tax Assets before Valuation Allowance | 851,870 | 939,294 | |
Valuation Allowance | (24,130) | — | |
Total Deferred Tax Assets | 827,740 | 939,294 | |
Deferred Tax Liabilities | |||
Investment Basis Differences / Net Unrealized Gains & Losses | 3,082,831 | 3,030,794 | |
Indefinite Lived Intangible Asset(2) | 454,284 | 444,123 | |
Operating Lease Right-of-Use Asset | 176,818 | 179,640 | |
Other | 91,478 | 74,452 | |
Total Deferred Tax Liabilities | 3,805,411 | 3,729,009 | |
Total Deferred Taxes, Net | $(2,977,671) | $(2,789,715) |
(1)In connection with exchanges of KKR Holdings equity into common stock of KKR & Co. Inc., KKR records a deferred tax asset associated with an increase in
KKR & Co. Inc.'s share of the tax basis of the tangible and intangible assets of KKR Group Partnership. This amount is offset by an adjustment to record
amounts due to KKR Holdings and principals under the tax receivable agreement, which is included within Due to Affiliates in the consolidated statements
of financial condition. The net impact of these adjustments was recorded as an adjustment to equity at the time of the exchanges.
(2)In connection with the acquisition of KJRM in 2022, KKR recognized a deferred tax liability resulting from the difference in the book and tax basis of the
indefinite lived intangibles.
Insurance | December 31, 2025 | December 31, 2024 | |
Deferred Tax Assets | |||
Insurance Reserves | $1,172,164 | $675,090 | |
Insurance Intangibles | 421,016 | 461,211 | |
Net Operating Loss and Capital Loss Carryforwards | 1,166,358 | 813,382 | |
Insurance Investment Basis Differences, Including Derivatives | 235,583 | 819,881 | |
Other | — | 84,006 | |
Total Deferred Tax Assets before Valuation Allowance | 2,995,121 | 2,853,570 | |
Valuation Allowance | (42,631) | (36,933) | |
Total Deferred Tax Assets | 2,952,490 | 2,816,637 | |
Deferred Tax Liabilities | |||
Insurance Loss Reserve Adjustment | — | 27,965 | |
Other | 153,035 | — | |
Total Deferred Tax Liabilities | 153,035 | 27,965 | |
Total Deferred Taxes, Net | $2,799,455 | $2,788,672 |
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income
will be generated to permit use of the existing deferred tax assets. As of December 31, 2025, a valuation allowance of
$24.1 million has been recorded against certain state deferred tax assets primarily due to tax credit carryforwards that are
expected to expire unutilized.
In 2022, changes in market conditions, including rapidly rising interest rates, impacted the unrealized tax gains and losses
in the available for sale securities portfolios of Global Atlantic, resulting in deferred tax assets related to net unrealized tax
capital losses for which the carryforward period has not yet begun. As such, when assessing recoverability, Global Atlantic
considered our ability and intent to hold the underlying securities to recovery. Based on all available evidence, Global Atlantic
concluded that a valuation allowance should be established on a portion of the US deferred tax assets related to unrealized
tax capital losses that are not more-likely-than-not to be realized, which represents the portion of the portfolio Global Atlantic
estimates it would not be able to hold to recovery. In 2024, Global Atlantic concluded that it had the ability to utilize realized
capital loss carryforwards prior to their expiration, and to recover its unrealized losses in the available for sale securities
portfolio. As a result, Global Atlantic concluded that it was more likely than not that the related US deferred tax assets would
be wholly realizable, and consequently released the previously recorded valuation allowance recorded against its deferred
income tax assets. Therefore, the valuation allowance of $89 million was released through the income tax expense line of the
statement of operations as of December 31, 2024. As of December 31, 2025, there is no valuation allowance on realized or
unrealized capital losses, as management concluded that realization is more likely than not. Certain Global Atlantic in scope
entities have a full valuation allowance of $4.6 million on its net deferred tax assets, as realization is not more likely than not.
On December 27, 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax ("Bermuda CIT").
Commencing on January 1, 2025, the Bermuda CIT generally will impose a 15% corporate income tax on in-scope entities that
are residents in Bermuda or have a Bermuda permanent establishment. On January 2, 2024, Global Atlantic became subject to
Bermuda CIT and resulted in the establishment of a $22.1 million deferred tax asset, primarily on available-for-sale securities,
which was offset by a full valuation allowance. As of December 31, 2025, deferred tax assets associated with Bermuda CIT on
Global Atlantic and certain in-scope entities was $38.1 million. Global Atlantic does not believe those deferred tax assets will
more likely than not be realized and therefore maintains a full valuation allowance.
As of December 31, 2025, KKR has state tax credit carryforwards of $24.1 million that will begin to expire in 2031. As of
December 31, 2025, the Global Atlantic and certain in-scope entities have U.S. federal net operating loss ("NOL")
carryforwards totaling $3.3 billion; $56.3 million will begin to expire in 2034 and the remainder has an indefinite life. Global
Atlantic also has capital loss carryforwards of $1.8 billion which will begin to expire in 2027.
As of December 31, 2025, KKR has accumulated undistributed earnings generated by certain foreign subsidiaries for
which we have not recorded any deferred taxes with respect to outside U.S. federal income tax basis difference on these
subsidiaries because of our ability and intent to reinvest such earnings indefinitely unless they can be distributed tax free. KKR
will continue to evaluate its capital management plans. It is not practicable for us to determine the amount of unrecognized
deferred income tax liability due to the complexity associated with the hypothetical calculation.
On December 20, 2021, the OECD released Pillar Two Model Rules, which contemplate a global 15% minimum tax rate. In
January 2026, the OECD released a “side-by-side” administrative guidance package under Pillar Two, agreed to by 145
jurisdictions, which introduces simplification measures and additional safe harbors intended to reduce compliance burdens
and further align the global minimum tax framework. The package includes a simplified effective tax rate safe harbor,
extensions of transitional relief, a new substance-based tax incentive safe harbor, and a side-by-side system for reporting in
various countries in which we do business. For the year ended December 31, 2025, KKR concluded there was no material
impact on income taxes with respect to Pillar Two. KKR will continue to evaluate the potential future impacts of Pillar Two and
will continue to review the issuance of this guidance.
For the year ended December 31, 2025, cash payments of income taxes, net of refunds, were as follows:
For the Year Ended | |
December 31, 2025 | |
Federal | $841,229 |
State | 155,596 |
Foreign | |
United Kingdom | 105,296 |
Other | 107,095 |
Total Payments, net of refunds | $1,209,216 |
Tax Contingencies
KKR files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of
business, KKR is subject to examination by U.S. federal and certain state, local and foreign tax regulators. As of December 31,
2025, tax returns of KKR and its predecessor entities are no longer subject to examinations for years before 2018 for U.S.
federal tax returns and 2014 for state and local tax returns under general statute of limitations provisions.
For the years ended December 31, 2025, 2024, and 2023, KKR's unrecognized tax benefits relating to uncertain tax
positions, excluding related interest and penalties, consisted of the following:
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Unrecognized Tax Benefits, beginning of period | $32,830 | $16,476 | $41,008 | ||
Gross increases in tax positions in prior periods | — | 10,677 | — | ||
Gross decreases in tax positions in prior periods | (577) | — | (13,878) | ||
Gross increases in tax positions in current period | 7,362 | 5,927 | 935 | ||
Lapse of statute of limitations | — | (250) | (219) | ||
Settlements with taxing authorities | (7,027) | — | (11,370) | ||
Unrecognized Tax Benefits, end of period | $32,588 | $32,830 | $16,476 | ||
If the above tax benefits were recognized, the effective income tax rate would be reduced. KKR recognizes interest and
penalties accrued related to unrecognized tax benefits as income tax expense. Related to the unrecognized tax benefits, KKR
had a net increase of accrued penalties of $0.3 million and interest of $1.6 million during 2025 and in total, as of December
31, 2025, recognized a liability for penalties of $2.6 million and interest of $8.5 million. During 2024, penalties increased by
$0.4 million and interest increased by $1.8 million and in total, as of December 31, 2024, recognized a liability for penalties of
$2.3 million and interest of $6.9 million. During 2023, penalties decreased by $1.3 million and interest decreased by
$6.7 million and in total, as of December 31, 2023, recognized a liability for penalties of $2.0 million and interest of
$5.1 million.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 15, 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.