Rithm Capital Corp.RITM
Rithm Capital Corp. Income Taxes Disclosure
INCOME TAXES
The following table shows income (loss) before income tax expense (or benefit) disaggregated between domestic and foreign:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income from domestic operations before income tax | $ | 767,073 | $ | 1,210,811 | $ | 733,316 | |||||||||||
| Income (loss) from foreign operations before income tax | 39,310 | (2,002) | 19,517 | ||||||||||||||
| Income before Income Taxes | $ | 806,383 | $ | 1,208,809 | $ | 752,833 | |||||||||||
Income tax expense (benefit) consists of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 10,813 | $ | 1,283 | $ | 5,030 | |||||||||||
| State and local | 1,889 | 1,897 | 416 | ||||||||||||||
| Foreign | 15,241 | 9,735 | 377 | ||||||||||||||
| Total current income tax expense | 27,943 | 12,915 | 5,823 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 16,170 | 174,306 | 76,380 | ||||||||||||||
| State and local | 42,986 | 80,917 | 39,430 | ||||||||||||||
| Foreign | 1,192 | (821) | 526 | ||||||||||||||
| Total deferred income tax expense | 60,348 | 254,402 | 116,336 | ||||||||||||||
| Total Income Tax Expense | $ | 88,291 | $ | 267,317 | $ | 122,159 | |||||||||||
Total income taxes paid (net of refunds) consists of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. federal | $ | 9,881 | $ | 1,850 | $—(A) | ||||||||||||
| U.S. state and local: | |||||||||||||||||
| New York State | —(A) | —(A) | 380 | ||||||||||||||
| New York City | —(A) | 1,467 | 395 | ||||||||||||||
| Pennsylvania | —(A) | —(A) | 400 | ||||||||||||||
| Other | 91 | 287 | 1,255 | ||||||||||||||
| Foreign: | |||||||||||||||||
| United Kingdom | 5,620 | 8,515 | 4,094 | ||||||||||||||
| Other | 205 | 59 | —(A) | ||||||||||||||
| Total | $ | 15,797 | $ | 12,178 | $ | 6,524 | |||||||||||
(A)Jurisdiction is below the threshold for the period presented.
Rithm Capital has qualified as a REIT for each of its tax years through December 31, 2025. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.
Rithm Capital operates various business segments, including Origination and Servicing, Asset Management and portions of the Investment Portfolio, through TRSs that are subject to regular corporate income taxes, which have been provided for in the provision for income taxes, as applicable. Refer to Note 4 for further details.
The decrease in income tax expense for the year ended December 31, 2025 is primarily driven by deferred tax benefits resulting from changes in the fair value of MSRs and loans held within taxable entities, offset by income generated by the Origination and Servicing and Asset Management segments as well as deferred tax expense generated from increased valuation allowances on definite-lived deferred tax assets.
The increase in income tax expense for the year ended December 31, 2024 is primarily driven by current and deferred tax expense resulting from changes in the fair value of MSR and loans held within taxable entities, offset by income generated by the Origination and Servicing and Asset Management segments.
As part of the Crestline acquisition, Rithm Capital acquired a net deferred tax asset of $6.3 million, primarily composed of deferred tax assets related to insurance reserves. As of December 31, 2025, Crestline recorded a deferred tax asset of $6.4 million, which is reported within other assets in the consolidated balance sheets. As of December 31, 2025, Rithm Capital recorded a net deferred tax liability of $849.4 million, primarily composed of deferred tax liabilities generated through the deferral of gains from residential mortgage loans sold by the origination business and changes in fair value of MSRs, loans and swaps held within taxable entities, offset by deferred tax assets related to net operating losses and tax deductible goodwill. The net deferred tax liability is reported within accrued expenses and other liabilities in the consolidated balance sheets.
The difference between Rithm Capital’s reported provision for income taxes and the U.S. federal statutory rate of 21.0% is as follows:
| December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| U.S. federal statutory tax | $ | 169,340 | 21.00 | % | $ | 253,850 | 21.00 | % | $ | 158,095 | 21.00 | % | |||||||||||||||||||||||
State and local income tax, net of federal benefit(A)(B)(C) | 820 | 0.10 | % | 38,949 | 3.22 | % | 15,550 | 2.07 | % | ||||||||||||||||||||||||||
| Foreign tax effects | (3,777) | (0.47) | % | 16,103 | 1.33 | % | (1,944) | (0.26) | % | ||||||||||||||||||||||||||
| Effect of changes in tax laws or rates enacted in current year | 32,246 | 4.00 | % | 32,919 | 2.72 | % | 8,656 | 1.15 | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Tax Credits: | |||||||||||||||||||||||||||||||||||
| Foreign tax credits | (11,350) | (1.41) | % | (9,139) | (0.76) | % | — | — | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | 40,257 | 4.99 | % | 6,923 | 0.57 | % | 3,535 | 0.47 | % | ||||||||||||||||||||||||||
| Non-taxable or Non-deductible Items: | |||||||||||||||||||||||||||||||||||
REIT income not subject to tax(D) | (155,786) | (19.32) | % | (81,872) | (6.77) | % | (67,420) | (8.96) | % | ||||||||||||||||||||||||||
| Non-deductible compensation | 12,377 | 1.53 | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Other non-taxable or non-deductible items | (1,025) | (0.13) | % | 7,464 | 0.62 | % | 2,326 | 0.31 | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits: | |||||||||||||||||||||||||||||||||||
| United Kingdom | 11,350 | 1.41 | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Other | (6,161) | (0.76) | % | 2,120 | 0.18 | % | 3,361 | 0.45 | % | ||||||||||||||||||||||||||
| Total Provision | $ | 88,291 | 10.94 | % | $ | 267,317 | 22.11 | % | $ | 122,159 | 16.23 | % | |||||||||||||||||||||||
(A)State taxes in California, New York State and New York City made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2025.
(B)State taxes in California, New York State, New York City and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2024.
(C)State taxes in California, New York State, New York City, Florida and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category for the year ended December 31, 2023.
(D)The effective tax rate attributable to REIT income not subject to tax is driven by the mix of earnings within the REIT and TRSs, which can vary significantly year over year.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred Tax Assets: | |||||||||||
Net operating losses and tax credit carryforwards(A) | $ | 281,017 | $ | 226,781 | |||||||
| Basis differences related to assets and investments | 48,635 | 77,985 | |||||||||
| Goodwill | 176,741 | 186,027 | |||||||||
| Fixed asset depreciation | 12,297 | 19,658 | |||||||||
| Accrued expenses | 72,996 | 58,467 | |||||||||
| Other | 9,075 | 4,204 | |||||||||
| Total deferred tax assets | 600,761 | 573,122 | |||||||||
| Less: valuation allowance | (73,828) | (34,784) | |||||||||
| Net deferred tax assets | 526,933 | 538,338 | |||||||||
| Deferred Tax Liabilities: | |||||||||||
| Mortgage servicing rights | (1,304,467) | (1,239,428) | |||||||||
| Basis differences related to assets and investments | (65,444) | (81,369) | |||||||||
| Other | — | (3,682) | |||||||||
| Total deferred tax liability | (1,369,911) | (1,324,479) | |||||||||
| Net Deferred Tax Liabilities | $ | (842,978) | $ | (786,141) | |||||||
(A)As of December 31, 2025, Rithm Capital’s TRSs had approximately $1.0 billion of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. Approximately $432.5 million of federal and state net operating losses are subject to an annual Internal Revenue Code Section 382 limitation. The federal and state net operating loss carryforwards will begin to expire between 2028 and 2042. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs’ ability to generate sufficient taxable income prior to the expiration of the carryforward period.
In assessing the realizability of deferred tax assets, Rithm Capital considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. During the year ended December 31, 2025, the Company increased the valuation allowance on definite-lived deferred tax assets by $39.0 million, including federal and state net operating losses and foreign tax credits. The change was driven primarily by changes to taxable income forecasts. The valuation allowance as of December 31, 2025 was $73.8 million.
The following table presents changes in the Company’s deferred tax asset valuation allowance for the periods indicated:
| Balance at December 31, 2023 | $ | 34,563 | ||||||
| Net change | 221 | |||||||
| Balance at December 31, 2024 | 34,784 | |||||||
| Net change | 39,044 | |||||||
| Balance at December 31, 2025 | $ | 73,828 | ||||||
Rithm Capital and its TRSs file income tax returns with the U.S. federal government and various state and local jurisdictions. Generally, Rithm Capital is no longer subject to tax examinations by tax authorities for tax years ended prior to December 31, 2022. Rithm Capital recognizes tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. As of December 31, 2025, Rithm Capital has no material uncertainties to be recognized. Rithm Capital does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date.
Common stock distributions were taxable as follows:
| Year | Dividends per Share | Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||
2025(A) | $ | 1.00 | 100 | % | — | % | — | % | |||||||||||||||
2024(B) | 1.00 | 100 | % | — | % | — | % | ||||||||||||||||
2023(C) | 1.25 | 100 | % | — | % | — | % | ||||||||||||||||
(A)The entire $0.25 per share dividend declared in December 2025 and paid in January 2026 is treated as received by stockholders in 2025.
(B)The entire $0.25 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2024.
(C)The entire $0.25 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2023.
Series A Preferred stock distributions were as follows:
| Year | Dividends per Share | Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||
2025(A) | $ | 2.64 | 100 | % | — | % | — | % | |||||||||||||||
2024(B) | 2.12 | 100 | % | — | % | — | % | ||||||||||||||||
2023(C) | 1.88 | 100 | % | — | % | — | % | ||||||||||||||||
(A)The entire $0.63 per share dividend declared in December 2025 and paid in January 2026 is treated as received by stockholders in 2026.
(B)The entire $0.68 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.
(C)The entire $0.47 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.
Series B Preferred stock distributions were as follows:
| Year | Dividends per Share | Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||
2025(A) | $ | 2.60 | 100 | % | — | % | — | % | |||||||||||||||
2024(B) | 2.04 | 100 | % | — | % | — | % | ||||||||||||||||
2023(C) | 1.78 | 100 | % | — | % | — | % | ||||||||||||||||
(A)The entire $0.62 per share dividend declared in December 2025 and paid in January 2026 is treated as received by stockholders in 2026.
(B)The entire $0.67 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.
(C)The entire $0.45 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.
Series C Preferred stock distributions were as follows:
| Year | Dividends per Share | Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||
2025(A) | $ | 2.20 | 100 | % | — | % | — | % | |||||||||||||||
2024(B) | 1.59 | 100 | % | — | % | — | % | ||||||||||||||||
2023(C) | 1.59 | 100 | % | — | % | — | % | ||||||||||||||||
(A)The entire $0.58 per share dividend declared in December 2025 and paid in January 2026 is treated as received by stockholders in 2026.
(B)The entire $0.40 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.
(C)The entire $0.40 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.
Series D Preferred stock distributions were as follows:
| Year | Dividends per Share | Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||
2025(A) | $ | 1.75 | 100 | % | — | % | — | % | |||||||||||||||
2024(B) | 1.75 | 100 | % | — | % | — | % | ||||||||||||||||
2023(C) | 1.75 | 100 | % | — | % | — | % | ||||||||||||||||
(A)The entire $0.44 per share dividend declared in December 2025 and paid in January 2026 is treated as received by stockholders in 2026.
(B)The entire $0.44 per share dividend declared in December 2024 and paid in January 2025 is treated as received by stockholders in 2025.
(C)The entire $0.44 per share dividend declared in December 2023 and paid in January 2024 is treated as received by stockholders in 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 22, 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.