Ethos Technologies Inc. Income Taxes Disclosure

11. Income Taxes

The Company files income tax returns in the U.S. federal, Singapore, India and various state jurisdictions.

Beginning in the fiscal year ended December 31, 2025 annual reporting, the Company adopted ASU 2023-09 prospectively. See Note 2 for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

The Company records a valuation allowance to reduce deferred tax assets to the amount management believes is more likely than not to be realized. The utilization of deferred tax assets is limited by the amount of taxable income expected to be generated within the allowable carryforward period and other factors. Management also considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The net decrease in the total valuation allowance for the year ending December 31, 2025 was $13,975, primarily from changes in temporary differences and current year pre-tax book income. The net decrease in the total valuation allowance for the year ending December 31, 2024 is $10,603, primarily from the net operating losses generated.

Federal and state tax laws impose substantial restrictions on the utilization of net operating loss and credit carryforwards in the event of an "ownership change" for tax purposes, as defined in Section 382 of the Internal Revenue code. Accordingly, the Company's ability to utilize these carryforwards may be limited as a result of such ownership changes. Such a limitation could result in limitation in the use of the net operating losses in future years and possibly a reduction of the net operating losses available. Based on ownership changes that have occurred through December 31, 2025, the Company has reduced net operating losses available by $2,600 and research and development tax credits by $1,200. This reduction had no impact on tax expense due to the offsetting impact of the valuation allowance.

The Company’s tax returns are subject to the normal statute of limitations, three years from the filing date for federal income tax purposes. The federal and state statute of limitations generally remain open for years in which tax losses are generated until three years from the year those losses are utilized. Under these rules, the 2016 and later year NOLs of Ethos Technologies Inc. are still subject to audit by the IRS and state and local jurisdictions. The December 31, 2022 and later period Singapore returns of Ethos Singapore Pte Ltd. are subject to exam by the Singapore tax authorities. The March 31, 2023 and later period India returns of Ethos International Holdings LLC are subject to exam by the Indian tax authorities.

The Company records interest and penalties, if any, as a component of its income tax expense in the consolidated statements of operations and comprehensive income (loss). No interest expense or penalties were recognized during the years ended December 31, 2025 and 2024.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The legislation did not have a material impact on the Company’s income tax expense for the year ended December 31, 2025, nor did it materially change the Company’s effective income tax rate for 2025.