KEMPER CorpKMPR
KEMPER Corp Income Taxes Disclosure
INCOME TAXES
The tax effects of temporary differences that give rise to significant portions of the Company’s Net Deferred Income Tax Assets and Deferred Income Tax Liabilities at December 31, 2025 and 2024 were:
| DOLLARS IN MILLIONS | 2025 | 2024 | ||||||||||||
| Deferred Income Tax Assets: | ||||||||||||||
| Insurance Reserves | $ | 5.5 | $ | — | ||||||||||
| Unearned Premium Reserves | 51.5 | 52.8 | ||||||||||||
| Tax Capitalization of Policy Acquisition Costs | 51.8 | 49.5 | ||||||||||||
| Payroll and Employee Benefit Accruals | 29.9 | 34.7 | ||||||||||||
| Investments | 118.4 | 147.6 | ||||||||||||
| Net Operating Loss and Credit Carryforwards | 3.9 | 14.0 | ||||||||||||
| Other | 60.4 | 45.9 | ||||||||||||
| Subtotal | 321.4 | 344.5 | ||||||||||||
| Valuation Allowance | (38.0) | (38.7) | ||||||||||||
| Total Deferred Income Tax Assets | 283.4 | 305.8 | ||||||||||||
| Deferred Income Tax Liabilities: | ||||||||||||||
| Insurance Reserves | — | 39.5 | ||||||||||||
| Deferred Policy Acquisition Costs | 137.9 | 132.3 | ||||||||||||
Goodwill and Other Intangible Assets | 35.5 | 35.0 | ||||||||||||
| Depreciable Assets | 21.2 | 14.6 | ||||||||||||
| Other | 2.5 | 4.4 | ||||||||||||
| Total Deferred Income Tax Liabilities | 197.1 | 225.8 | ||||||||||||
Net Deferred Income Tax Assets1 | $ | 86.3 | $ | 80.0 | ||||||||||
1 Includes $4.2 million and $1.5 million attributable to Kemper Reciprocal at December 31, 2025 and 2024, respectively, which is reported as a consolidated variable interest entity. | ||||||||||||||
Due to jurisdictional differences in which the Company operates, the consolidated net deferred tax asset of $86.3 million is reported on the Consolidated Balance Sheets as a total deferred tax asset of $101.1 million and a deferred tax liability of $14.8 million.
The evaluation of the recoverability of the deferred tax asset and the need for a valuation allowance is based on the weight of all available positive and negative evidence. For the year ended December 31, 2025, a valuation allowance of $38.0 million was recorded against those deferred tax assets that were determined not to be more likely than not to be realized based on Management’s assessment, a decrease of $0.7 million from the year ended December 31, 2024 when a $38.7 million valuation allowance was recorded.
The expiration of federal net operating loss (“NOL”) carryforwards and their related deferred income tax assets at December 31, 2025 is presented below by year of expiration.
| DOLLARS IN MILLIONS | NOL Carry-forwards | Deferred Tax Asset | ||||||||||||
| Expiring in: | ||||||||||||||
| 2043 | $ | 0.3 | $ | 0.1 | ||||||||||
| 2044 | 4.4 | 0.9 | ||||||||||||
| 2045 | 14.1 | 2.9 | ||||||||||||
| Total All Years | $ | 18.8 | $ | 3.9 | ||||||||||
The carryforwards relate to federal NOL carryforwards which the Company expects to fully utilize prior to expiration.
.NOTE 27. INCOME TAXES (Continued)
There were no Unrecognized Tax Benefits at December 31, 2025, 2024 or 2023. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income Tax Expense (Benefit). There were no liabilities for accrued interest and penalties as of December 31, 2025, 2024 or 2023.
The statute of limitations related to Kemper and its eligible subsidiaries’ consolidated Federal income tax returns is closed for all tax years up to and including 2011 as well as 2018 and 2019. As a result of the Company filing amended federal income tax returns, tax years 2012 and 2013 are under limited examination with respect to carryback adjustments associated with the amended returns. Tax years 2020 and 2022 are currently under examination. The statute of limitations related to tax years 2014, 2015, 2016, and 2017 has been extended to December 31, 2026. Tax years 2022, 2023 and 2024 are subject to a statute of three years from the extended due dates of October 15, 2023, 2024 and 2025, respectively.
The expiration of the statute of limitations related to the various state income tax returns that Kemper and its subsidiaries file varies by state.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed, enacting significant changes to federal tax law. The OBBBA includes, among other provisions, extension and modifications of various provisions from the 2017 Tax Cuts and Jobs Act, immediate expensing of domestic research and experimental costs, accelerated depreciation, compensation-related items, and the repeal of certain clean energy tax credits. The Company has evaluated the impacts of the OBBBA, which were not material to the consolidated financial statements, and will continue to monitor developments as further information becomes available.
The components of Income Tax Expense (Benefit) from Operations for the years ended December 31, 2025, 2024 and 2023 were:
| DOLLARS IN MILLIONS | 2025 | 2024 | 2023 | |||||||||||||||||
Current Income Tax Expense (Benefit) | $ | 58.3 | $ | 11.9 | $ | (4.0) | ||||||||||||||
Deferred Income Tax (Benefit) Expense | (30.2) | 64.1 | (70.8) | |||||||||||||||||
Income Tax Expense (Benefit) | $ | 28.1 | $ | 76.0 | $ | (74.8) | ||||||||||||||
Federal, state and local, and foreign income taxes paid, net of income tax refunds received for the year ended December 31, 2025. 2024 and 2023 were:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| DOLLARS IN MILLIONS | Amount | Percentage of Total Taxes Paid | Amount | Percentage of Total Taxes Paid | Amount | Percentage of Total Taxes Paid | |||||||||||||||||||||||
United States: | |||||||||||||||||||||||||||||
Federal | $ | 33.1 | 93.8 | % | $ | 9.9 | 88.4 | % | $ | (107.7) | 100.9 | % | |||||||||||||||||
State and Local | 2.2 | 6.2 | 1.3 | 11.6 | 1.0 | (0.9) | |||||||||||||||||||||||
Foreign: | |||||||||||||||||||||||||||||
Bermuda | — | — | — | — | — | — | |||||||||||||||||||||||
Total Income Taxes Paid (Refunds Received) | $ | 35.3 | 100.0 | % | $ | 11.2 | 100.0 | % | $ | (106.7) | 100.0 | % | |||||||||||||||||
NOTE 27. INCOME TAXES (Continued)
A reconciliation of the Statutory Federal Income Tax Expense (Benefit) and Rate to the Company’s Income Tax Expense (Benefit) and Rate from Operations for the years ended December 31, 2025. 2024 and 2023 is presented below.
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| DOLLARS IN MILLIONS | Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||||||||||
United States | $ | 93.8 | $ | 469.3 | $ | (490.1) | |||||||||||||||||||||||
Bermuda | 66.9 | (80.8) | 143.0 | ||||||||||||||||||||||||||
Income (Loss) from Continuing Operations before Tax | $ | 160.7 | $ | 388.5 | $ | (347.1) | |||||||||||||||||||||||
Statutory Federal Income Tax (Expense) Benefit | $ | 33.7 | 21.0 | % | $ | 81.6 | 21.0 | % | $ | (72.9) | 21.0 | % | |||||||||||||||||
State and Local Income Tax Expense (Benefit), net of Federal Income Tax Effect 1 | 1.7 | 1.1 | 0.6 | 0.2 | 1.1 | (0.3) | |||||||||||||||||||||||
Foreign Tax Effects: | |||||||||||||||||||||||||||||
Bermuda | |||||||||||||||||||||||||||||
Tax Rate Difference between Bermuda and United States | (4.0) | (2.5) | 17.0 | 4.4 | (30.0) | 8.6 | |||||||||||||||||||||||
Bermuda Tax - Change in Enactment | — | — | (2.9) | (0.7) | (27.4) | 7.9 | |||||||||||||||||||||||
Foreign Tax Credits | (9.3) | (5.8) | — | — | — | — | |||||||||||||||||||||||
Change in Valuation Allowance | (0.7) | (0.4) | 2.9 | 0.7 | 27.4 | (7.9) | |||||||||||||||||||||||
Effect of Cross-Border Tax Laws | |||||||||||||||||||||||||||||
U.S. Tax on Foreign Insurance Income | 14.0 | 8.7 | (17.0) | (4.4) | 30.0 | (8.6) | |||||||||||||||||||||||
Nontaxable or Nondeductible Items: | |||||||||||||||||||||||||||||
Tax exempt Income and Dividends Received Deductions | (3.2) | (2.0) | (3.4) | (0.9) | (4.8) | 1.4 | |||||||||||||||||||||||
Untaxed Earnings on Company-Owned Life Insurance | (9.0) | (5.6) | (7.5) | (1.9) | (6.1) | 1.8 | |||||||||||||||||||||||
| Nondeductible Executive Compensation (§162(m)) | 6.7 | 4.2 | 3.5 | 0.9 | 1.8 | (0.5) | |||||||||||||||||||||||
Nondeductible - Goodwill Impairment | — | — | — | — | 6.3 | (1.8) | |||||||||||||||||||||||
Other | 1.5 | 0.9 | 2.4 | 0.6 | 2.7 | (0.8) | |||||||||||||||||||||||
Tax Credits | (3.3) | (2.1) | (1.2) | (0.3) | (2.9) | 0.8 | |||||||||||||||||||||||
Other Adjustments | — | — | — | — | — | — | |||||||||||||||||||||||
Income Tax Expense (Benefit) | $ | 28.1 | 17.5 | % | $ | 76.0 | 19.6 | % | $ | (74.8) | 21.6 | % | |||||||||||||||||
Net Income (Loss) | 132.6 | 312.5 | (272.3) | ||||||||||||||||||||||||||
Noncontrolling Interest | (13.6) | (6.7) | (0.3) | ||||||||||||||||||||||||||
Noncontrolling Interest Tax Benefit | (2.9) | (1.8) | % | (1.4) | (0.4) | % | (0.1) | — | % | ||||||||||||||||||||
Net Income (Loss) Attributable to Kemper Corporation | $ | 143.3 | $ | 317.8 | $ | (272.1) | |||||||||||||||||||||||
1 For the years ended December 31, 2025, and 2024, state taxes in Illinois and Florida represented the majority (greater than 50 percent) of the state and local tax effect in this category. For the year ended December 31, 2023, state taxes in Louisiana and Florida represented the majority of state and local tax effect in this category. | |||||||||||||||||||||||||||||
NOTE 27. INCOME TAXES (Continued)
Comprehensive Income Tax Expense (Benefit) included in the Consolidated Financial Statements for the years ended December 31, 2025, 2024 and 2023 was:
| DOLLARS IN MILLIONS | 2025 | 2024 | 2023 | |||||||||||||||||
Income Tax Expense (Benefit): | ||||||||||||||||||||
| Operations | $ | 28.1 | $ | 76.0 | $ | (74.8) | ||||||||||||||
Unrealized Appreciation (Depreciation) on Securities | 34.0 | (42.2) | 50.3 | |||||||||||||||||
| Tax Effects from Postretirement Benefit Plans | (0.4) | (0.3) | 12.4 | |||||||||||||||||
| Tax Effects on changes in Discount Rate for Life Reserves | (7.8) | 58.3 | (21.2) | |||||||||||||||||
| Tax Effects from Cash Flow Hedge | (0.2) | (0.8) | — | |||||||||||||||||
Comprehensive Income Tax Expense (Benefit) | $ | 53.7 | $ | 91.0 | $ | (33.3) | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 7, 2025 | |
| 2023 | Feb 7, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 10, 2022 | |
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.