Primerica, Inc. Income Taxes Disclosure

(13) Income Taxes

Effective tax rate reconciliation. Income taxes from continuing operations differs from the amount determined by multiplying income from continuing operations before income taxes by the U.S. statutory federal tax rate of 21% for the years ended December 31, 2025, 2024 and 2023. The reconciliation for such differences follows:

Deferred tax assets and liabilities. The main components of deferred income tax assets and liabilities were as follows:

The majority of total deferred tax assets are attributable to future policy benefit reserves and unpaid policy claims, which represents the difference between the financial statement carrying value and tax basis for LFPB and policy claims and other benefits payable. The tax basis for future policy benefit reserves and unpaid policy claims is actuarially determined in accordance with guidelines set forth in the respective jurisdictional tax codes in the U.S. and Canada. The majority of total deferred tax liabilities are attributable to

DAC, which represents the difference between the policy acquisition costs capitalized for U.S. GAAP purposes and those capitalized for tax purposes, as well as the difference in the resulting amortization methods.

The Company has state net operating losses resulting in a net deferred tax asset of $9.0 million as of December 31, 2025. Approximately one-third of the state net operating losses are available for use through 2037 and approximately two-thirds have an indefinite life. The Company has no other material net operating losses.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, carryback and carryforward periods, and tax planning strategies in making this assessment. As of December 31, 2025, management identified excess foreign tax credits of approximately $14.4 million that could not be used to offset the mandatory deemed repatriation of foreign earnings tax stipulated by the Tax Cuts and Jobs Act of 2017 and believes it will not be able to utilize these foreign tax credits in the future. Therefore, the Company established a deferred tax asset for these foreign tax credits with a corresponding full valuation allowance. The remaining foreign tax credits are scheduled to expire partially in 2026 and the remainder in 2027. With the exception of these foreign tax credits, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. Therefore, there were no other significant deferred tax asset valuation allowances as of December 31, 2025 or 2024. The Company has no other material tax credit carryforwards.

Income taxes paid. The components of income taxes paid were as follows:

Controlled foreign corporations. The Company has direct ownership of a group of controlled foreign corporations. The tax effects of controlled foreign corporations other than in Canada were not material. We have not made a permanent reinvestment assertion for any unremitted earnings in Canada; therefore, we have recorded a deferred tax liability to account for Canadian withholding taxes that will occur upon repatriation of such earnings and we continue to record deferred tax liabilities to account for Canadian withholding taxes as earnings are recognized.

The Company has no intentions to sell or substantially liquidate our Canadian operations and, therefore, has not provided for any additional outside basis difference for the amount of book basis in excess of tax basis in its Canadian subsidiaries. In addition, it is not practicable to determine the amount of the unrecognized deferred tax liability related to any additional outside basis difference in these entities.

Unrecognized tax benefits. The total amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect our effective tax rate was approximately $24.4 million and $20.2 million as of December 31, 2025 and 2024, respectively. We recognize interest expense related to unrecognized tax benefits in tax expense net of federal income tax. The total amount of accrued interest and penalties in the consolidated balance sheets was $6.0 million and $4.3 million as of December 31, 2025 and 2024, respectively. Additionally, we recognized $1.4 million, $0.4 million, and $0.4 million of interest expense related to unrecognized tax benefits in the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023, respectively.

We have an immaterial amount of penalties included in calculating our provision for income taxes.

The major tax jurisdictions in which we operate are the United States and Canada. We are currently open to audit by the Internal Revenue Service for the tax years ended December 31, 2022 and thereafter for federal income tax purposes. We are currently open to audit in Canada for tax years ended December 31, 2021 and thereafter for federal and provincial income tax purposes.

Qualified investment tax credit projects. We have investments in various limited partnerships that sponsor qualified affordable housing projects, which meet the definition of a VIE. We are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement in these VIEs equals the carrying value of the investments. The primary economic purpose of these investments is to achieve a satisfactory return on capital through the receipt of tax credits. Our qualified affordable housing project investments are accounted for using the proportional amortization method of accounting. During the years ended December 31, 2025, 2024, and 2023 the amount of income tax benefits recognized from these investments was insignificant.

Our investment in qualified affordable housing projects was $8.7 million and $9.8 million as of December 31, 2025 and 2024, respectively, and is included within policy loans and other invested assets on our consolidated balance sheets. Additionally, unfunded commitments to provide additional capital to investees in qualified affordable housing projects was $1.3 million and $4.4 million as of December 31, 2025 and 2024, respectively, and are included within other liabilities on our consolidated balance sheets. Substantially all of the unfunded commitments as of December 31, 2025 are expected to be paid out within the next one to two years.

Purchased tax credits. The Company purchased transferable federal income tax credits generated from a solar energy facility and battery storage system (the “Facilities”) that was placed in service during the fourth quarter of 2025. The cost of the income tax credits was $93.0 million, and the Company reduced its 2025 estimated federal income tax liability by $100.0 million. The cost of the income tax credits is included in income tax payable on the consolidated balance sheet as of December 31, 2025, and we settled the payment with the seller in January 2026. The net impact of these income tax credits is reflected in the effective tax rate reconciliation table above for the year ended December 31, 2025. As of December 31, 2025, we do not have any commitments to purchase additional income tax credits.