Solid Power, Inc. Income Taxes Disclosure

Note 13 – Income Taxes

The table below represents domestic versus foreign Loss before income tax expense (benefit).

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Income taxes included in the Consolidated Statements of Operations and Comprehensive Loss are detailed below.

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The table below represents net cash paid (refunds received) for income taxes.

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The tables below represent a reconciliation of the U.S. federal statutory income tax rate to effective tax rate. The Company has adopted the guidance in ASU 2023-09 on a prospective basis. The following table reflects the reconciliation rate for 2025 under the new guidance.

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The table below represents a reconciliation of the U.S. federal statutory tax rate to effective tax rate for the year ended December 31, 2024 under the prior guidance

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For the years ended December 31, 2025 and 2024, the effective tax rate was approximately 0.01% and (1.26)%, respectively. Differences between the statutory rate and the Company’s effective tax rate resulted from changes in valuation allowance and permanent differences for tax purposes in the treatment of certain nondeductible expenses.

The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and liabilities are presented below.

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The ultimate realization of deferred tax assets is dependent upon the existence, or generation, of taxable income in the periods when those temporary differences and net operating loss carryovers are deductible. Management considers the scheduled reversal of deferred tax liabilities, taxes paid in carryover years, projected future taxable income, available tax planning strategies, and other factors in making this assessment. Based on available evidence, management does not believe it is more likely than not that all of the deferred tax assets will be realized. Accordingly, the Company has established a valuation allowance equal to the net realizable deferred tax assets. The valuation allowance increased by $25,438 in 2025. The valuation allowance relates entirely to the uncertainty regarding the realizability of the Company’s deferred tax assets.

The Company had net operating losses and tax credit carryforwards as the year ended December 31, 2025 as follows:

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The following table summarizes the Company’s unrecognized tax benefits.

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As of December 31, 2025 and 2024, unrecognized tax benefits of $2,700 and $2,474, respectively, were recorded in other long-term liabilities and deferred tax liability. These unrecognized tax benefits would not impact the Company’s annual effective tax rate if recognized due to the Company’s valuation allowance. The Company recognizes interest and penalties, if any, related to unrecognized tax positions within the provision for income taxes in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

As of December 31, 2025, undistributed earnings for non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations and therefore no U.S. deferred taxes have been recorded.

The 2020 through 2024 tax years remain open to examination by the Internal Revenue Service and, with few exceptions, various other state tax agencies. These taxing authorities have the authority to examine those tax years until the applicable statutes of limitations expire.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes, among other things the permanent extension of certain provisions of the U.S. Tax Cuts and Jobs Act of 2017, modifications to the United States’ international tax framework, restoration of favorable tax treatment for certain business provisions, and acceleration of the phase-out of EV credits. The OBBBA contains a variety of effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on the reported results of operations.