NCR Voyix CorpVYX
NCR Voyix Corp Income Taxes Disclosure
8. INCOME TAXES
For the years ended December 31, income (loss) from continuing operations before income taxes consisted of the following:
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| Income (loss) before income taxes | ||||||||||||||||||||
| United States | $ | (54) | $ | (249) | $ | (451) | ||||||||||||||
| Foreign | 23 | 52 | (98) | |||||||||||||||||
| Total income (loss) from continuing operations before income taxes | $ | (31) | $ | (197) | $ | (549) | ||||||||||||||
For the years ended December 31, income tax expense (benefit) consisted of the following:
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| Income tax expense (benefit) | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Federal | $ | (89) | $ | (9) | $ | 26 | ||||||||||||||
| State | (3) | 2 | — | |||||||||||||||||
| Foreign | 18 | 26 | 31 | |||||||||||||||||
| Deferred | ||||||||||||||||||||
| Federal | 1 | (19) | (48) | |||||||||||||||||
| State | (4) | 1 | (3) | |||||||||||||||||
| Foreign | 4 | 3 | 178 | |||||||||||||||||
| Total income tax expense (benefit) | $ | (73) | $ | 4 | $ | 184 | ||||||||||||||
Disclosed below is a summary of income taxes paid by jurisdiction for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09:
| In millions | 2025 | |||||||
| Income taxes paid by jurisdiction | ||||||||
| Federal | $ | 258 | ||||||
| State | 31 | |||||||
| Foreign | 27 | |||||||
| Total income taxes paid | $ | 316 | ||||||
In 2025, there were no jurisdictions other than U.S. federal with income taxes paid that equaled or exceeded 5% of total income taxes paid.
The following table represents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09:
| In millions | 2025 | |||||||||||||
| Amount | Percent | |||||||||||||
| Income tax expense/(benefit) at the U.S. federal tax rate of 21% | $ | (6) | 21.0 | % | ||||||||||
State and local income taxes, net of federal income tax effect(1)(2) | (4) | 12.9 | % | |||||||||||
| Foreign tax effects | ||||||||||||||
| Australia | ||||||||||||||
| Statutory income tax rate differential | (7) | 22.6 | % | |||||||||||
| Gain/(loss) from restructuring | 25 | (80.6) | % | |||||||||||
| Other | 2 | (6.5) | % | |||||||||||
| Austria | ||||||||||||||
Gain/(loss) on disposition(2) | (5) | 16.1 | % | |||||||||||
| Cyprus | ||||||||||||||
| Statutory income tax rate differential | (5) | 16.1 | % | |||||||||||
| Changes in valuation allowances | 5 | (16.1) | % | |||||||||||
| Gain/(loss) from restructuring | (11) | 35.5 | % | |||||||||||
| Other | (1) | 3.2 | % | |||||||||||
| Israel | ||||||||||||||
Changes in valuation allowances(2) | 11 | (35.5) | % | |||||||||||
| Other | 6 | (19.4) | % | |||||||||||
| Other foreign jurisdictions | 8 | (28.0) | % | |||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Net CFC Tested Income (NCTI) | 25 | (80.6) | % | |||||||||||
| Income/(loss) from foreign branches, disregarded entities, and partnerships | (31) | 100.0 | % | |||||||||||
| Deferred tax liability on unremitted earnings | 7 | (22.6) | % | |||||||||||
| Other | (3) | 9.7 | % | |||||||||||
| Tax credits | ||||||||||||||
Research & Development (R&D) tax credits(2) | (7) | 22.6 | % | |||||||||||
| Other | (6) | 19.4 | % | |||||||||||
| Changes in valuation allowances | (11) | 35.5 | % | |||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Share-based payment awards | 5 | (16.1) | % | |||||||||||
| Gain/(loss) from restructuring | (66) | 212.9 | % | |||||||||||
| Other | 2 | (6.5) | % | |||||||||||
| Changes in unrecognized tax benefits | (6) | 19.4 | % | |||||||||||
| Effective income tax rate | $ | (73) | 235.0 | % | ||||||||||
(1)State taxes attributable to California and New York State represented the majority (greater than 50%) of the tax effect within this category for 2025.
(2)Indicates reconciling items that include changes in tax estimates for prior periods.
The Company’s tax provisions include a provision for income taxes in certain tax jurisdictions where its subsidiaries are profitable, but reflect only a portion of the tax benefits related to certain foreign subsidiaries’ tax losses due to the uncertainty of the ultimate realization of future benefits from these losses. During 2025, our tax rate was impacted by a $66 million benefit in the U.S. due to entity restructuring activities.
The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate prior to the adoption of ASU 2023-09 for the years ended December 31:
| In millions | 2024 | 2023 | ||||||||||||
| Income tax (benefit) expense at the U.S. federal tax rate of 21% | $ | (42) | $ | (114) | ||||||||||
| Foreign income tax differential | 8 | 1 | ||||||||||||
| Additional U.S. tax on foreign income | (6) | 14 | ||||||||||||
| State and local income taxes (net of federal effect) | 2 | (3) | ||||||||||||
| Other U.S. permanent book/tax differences | 1 | 4 | ||||||||||||
| Meals and entertainment expense | 1 | 2 | ||||||||||||
Cash surrender value received as income | 4 | — | ||||||||||||
| Nondeductible transaction costs | — | 2 | ||||||||||||
| Nondeductible executive compensation | (1) | 17 | ||||||||||||
| Dispositions | — | 16 | ||||||||||||
| Spin-off of NCR Atleos | — | 226 | ||||||||||||
| Gains/losses on internal entity restructuring | (4) | — | ||||||||||||
| Excess (benefit)/deficit from share-based payments | 8 | 2 | ||||||||||||
| Research and development tax credits | (3) | (2) | ||||||||||||
| Foreign tax law changes | (7) | (8) | ||||||||||||
| Valuation allowances | 57 | 31 | ||||||||||||
| Change in liability for unrecognized tax benefits | (9) | 3 | ||||||||||||
| Change in tax estimates for prior periods | (6) | (5) | ||||||||||||
| Other, net | 1 | (2) | ||||||||||||
| Total income tax (benefit) expense | $ | 4 | $ | 184 | ||||||||||
During 2024, our tax rate was impacted by a $57 million expense from recording a valuation allowance against deferred tax assets. During 2023, our tax rate was impacted by a net $226 million expense related to the Spin-Off of NCR Atleos. Also during 2023, our tax rate was impacted by a $31 million expense from recording a valuation allowance against deferred tax assets and a $17 million expense from nondeductible executive compensation.
As described in Note 1, “Basis of Presentation and Significant Accounting Policies”, on October 16, 2023, in connection with the Spin-Off, the Company completed a series of legal entity restructurings including both an internal and external spin-off transaction. These transactions are subject to tax laws in the U.S. and non-U.S. jurisdictions, which resulted in the use of significant judgments by management as it pertains to the interpretation and application of tax laws in the U.S. and non-U.S. jurisdictions to determine the potential taxability of the transactions.
The Company did not provide additional U.S. income tax or foreign withholding taxes, if any, on undistributed earnings of certain foreign subsidiaries given the intention continues to be that those earnings are reinvested indefinitely. The amount of unrecognized deferred tax liability associated with these indefinitely reinvested earnings is approximately $27 million. The unrecognized deferred tax liability is made up of a combination of U.S. and state income taxes and foreign withholding taxes.
We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income/loss, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.
Deferred income tax assets and liabilities included in the Consolidated Balance Sheets as of December 31 were as follows:
| In millions | 2025 | 2024 | ||||||||||||
| Deferred income tax assets | ||||||||||||||
| Employee pensions and other benefits | $ | 8 | $ | 15 | ||||||||||
| Other balance sheet reserves and allowances | 88 | 104 | ||||||||||||
| Tax loss and credit carryforwards | 191 | 155 | ||||||||||||
| Capitalized research and development | 90 | 78 | ||||||||||||
| Property, plant and equipment | 2 | 1 | ||||||||||||
| Lease liabilities | 51 | 54 | ||||||||||||
| Capitalized software | 37 | 50 | ||||||||||||
| Partnership deferred | 21 | — | ||||||||||||
| Other | 8 | 16 | ||||||||||||
| Total deferred income tax assets | $ | 496 | $ | 473 | ||||||||||
| Valuation allowance | (181) | (153) | ||||||||||||
| Net deferred income tax assets | $ | 315 | $ | 320 | ||||||||||
| Deferred income tax liabilities | ||||||||||||||
| Intangibles | $ | 85 | $ | 82 | ||||||||||
| Right of use assets | 54 | 57 | ||||||||||||
| Total deferred income tax liabilities | $ | 139 | $ | 139 | ||||||||||
| Total net deferred income tax assets | $ | 176 | $ | 181 | ||||||||||
The Company has previously recorded valuation allowances related to certain deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets. The recorded valuation allowances cover deferred tax assets, including tax loss carryforwards, interest expense carryforwards and foreign tax credits in tax jurisdictions where there is uncertainty as to the ultimate realization of those tax assets. If we are unable to generate sufficient future taxable income of the proper source in the time period within which the temporary differences underlying our deferred tax assets become deductible, or before the expiration of our loss and credit carryforwards, additional valuation allowances could be required.
As of December 31, 2025, the Company had U.S. federal, U.S. state (tax effected), and foreign tax attribute carryforwards of approximately $673 million. The net operating loss carryforwards that are subject to expiration will expire in the years 2026 through 2045. The attributes include U.S. tax credit carryforwards of $33 million, which expire in the years 2028 through 2034.
The Company’s current tax liability was $13 million and $336 million as of December 31, 2025 and December 31, 2024, respectively, presented within Other current liabilities on the Consolidated Balance Sheets. The decrease in the current tax liability is primarily due to the payment of $284 million of taxes related to the Digital Banking Sale.
The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the years ended December 31:
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| Gross unrecognized tax benefits - January 1 | $ | 46 | $ | 58 | $ | 87 | ||||||||||||||
| Increases related to tax positions from prior years | 16 | 1 | 1 | |||||||||||||||||
| Decreases related to tax positions from prior years | (1) | (5) | (1) | |||||||||||||||||
| Increases related to tax provisions taken during the current year | — | 1 | 2 | |||||||||||||||||
| Settlements with tax authorities | (1) | (4) | — | |||||||||||||||||
| Lapses of statutes of limitation | (11) | (5) | (1) | |||||||||||||||||
| Distributions to NCR Atleos | — | — | (30) | |||||||||||||||||
| Total gross unrecognized tax benefits - December 31 | $ | 49 | $ | 46 | $ | 58 | ||||||||||||||
Of the total amount of gross unrecognized tax benefits as of December 31, 2025, $38 million would affect the Company’s effective tax rate if realized. The Company’s liability arising from uncertain tax positions is recorded in Income tax accruals and Other current liabilities in the Consolidated Balance Sheets.
We recognized interest and penalties associated with uncertain tax positions as part of the provision for income taxes in our Consolidated Statements of Operations of $2 million of benefit, zero, and $4 million of expense for the years ended December 31, 2025, 2024, and 2023, respectively. The gross amount of interest and penalties accrued as of December 31, 2025 and 2024 was $16 million in each year, respectively.
In the United States, the Company files consolidated federal and state income tax returns, with statutes of limitations generally ranging from three to five years. U.S. federal tax years remain open from 2022 forward. During 2025, the Egyptian Tax Authority concluded an examination of the 2010-2013 tax years, resulting in an assessment of $1 million. The Company released a total of $2 million in tax reserves as a result of the settlement. Years beginning on or after 2014 are still open to examination by certain foreign taxing authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 26, 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.