T1 Energy Inc.TE
T1 Energy Inc. Income Taxes Disclosure
INCOME TAXES
Income Before Income Tax
The components of income before income tax are as follows:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Domestic | (316,916) | (80,400) | |||||||||
| International | (23,814) | (2,161) | |||||||||
| Income before income tax | (340,730) | $ | (82,561) | ||||||||
During the year ended December 31, 2025, certain amounts related to our European businesses that had previously been classified as held for sale as of December 31, 2024 were reclassified to held and used as it was determined that certain assets were no longer available for immediate sale or would be disposed of by means other than a sale and thus no longer met the criteria for classification as held for sale. Refer to Note 1 - Summary of Significant Accounting Policies for further details. Upon reclassification, the tax effects of these assets are presented as continuing operations.
Income tax benefit (expense) for the years ended December 31, 2025 and 2024 for continuing operations was as follows (in thousands):
| Year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Current: | |||||||||||
| Federal | $ | — | $ | — | |||||||
| State | (430) | — | |||||||||
| Foreign | (219) | — | |||||||||
| Total current tax expense | $ | (649) | $ | — | |||||||
| Deferred: | |||||||||||
| Federal | $ | 18,489 | $ | 14,142 | |||||||
| State | 1,532 | 1,618 | |||||||||
| Foreign | — | — | |||||||||
| Total deferred tax benefit | $ | 20,021 | $ | 15,760 | |||||||
| Provision for income taxes | $ | 19,372 | $ | 15,760 | |||||||
On July 4, 2025, Public Law 119-21, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted in the U.S. The OBBBA introduces several significant changes, including the permanent extension and modification of certain expiring provisions of the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions taking effect in tax year 2025 and others phased in through 2027. There were no material impacts of this legislation on our consolidated financial statements for the year ended December 31, 2025; however, management will continue to evaluate the full impact of these legislative changes as more guidance becomes available.
A reconciliation of our income tax benefit (expense) to the amount obtained by applying the statutory tax rate in the Company’s country of incorporation pursuant to the disclosure requirements of ASU 2023-09 as of December 31, 2025 is as follows (in thousands, except percentages):
| Year ended December 31, 2025 | ||||||||||||||
| Amount | Percentage | |||||||||||||
| U.S. federal statutory income tax | $ | 71,554 | 21.00 | % | ||||||||||
State and local income taxes(1) | 871 | 0.26 | ||||||||||||
| Foreign tax effects | ||||||||||||||
| Norway | ||||||||||||||
| Changes in valuation allowance | (4,970) | (1.46) | ||||||||||||
| Other foreign impacts | 226 | 0.07 | ||||||||||||
| Other foreign jurisdictions | ||||||||||||||
| Other foreign impacts | (476) | (0.14) | ||||||||||||
| Changes in valuation allowance | (26,607) | (7.81) | ||||||||||||
| Non-taxable or non-deductible items: | ||||||||||||||
| Fair value adjustments | (18,572) | (5.45) | ||||||||||||
| Other adjustments | (2,654) | (0.78) | ||||||||||||
| Effective income tax rate | $ | 19,372 | 5.69 | % | ||||||||||
(1) State and local taxes in Texas comprise the majority of this category.
A reconciliation of our income tax benefit (expense) to the amount obtained by applying the statutory tax rate in the Company’s country of incorporation as of December 31, 2024 is as follows (in thousands, except percentages):
| Year ended December 31, | ||||||||
| 2024 | ||||||||
| Pretax net loss | $ | (82,561) | ||||||
| Statutory tax rate | 21 | % | ||||||
| Income tax benefit calculated at statutory tax rate | 17,338 | |||||||
| State and local income tax provision | 1,618 | |||||||
| Permanent difference - Fair value adjustments | (3,401) | |||||||
| Permanent difference - Trina business combination transaction costs | (2,803) | |||||||
| Changes in valuation allowance | 2,021 | |||||||
| Other permanent tax items, net | 987 | |||||||
| Income tax benefit (expense) | $ | 15,760 | ||||||
| Effective tax rate | 19 | % | ||||||
Income Tax Payments
Disclosed below is a summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025:
| Year ended December 31, | ||||||||
| 2025 | ||||||||
| United States - Federal | $ | — | ||||||
| United States - State and local | 10 | |||||||
| Total current tax expense | $ | 10 | ||||||
Deferred Taxes
Deferred tax assets and liabilities presented are as follows (in thousands):
| Year ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Deferred tax assets | ||||||||||||||
| Tax loss carryforwards | $ | 70,275 | $ | 21,287 | ||||||||||
| Advances to suppliers | 10,107 | 10,799 | ||||||||||||
| Excess interest carryforwards | 10,720 | — | ||||||||||||
| Production reservation fee | 2,681 | 11,754 | ||||||||||||
| Deferred financing costs | — | 2,040 | ||||||||||||
| Deferred income | — | 6,270 | ||||||||||||
| Operating lease liability | 33,147 | 23,670 | ||||||||||||
| Stock-based compensation | 1,312 | 584 | ||||||||||||
| Fixed assets | 27,754 | 53 | ||||||||||||
| Others | 5,716 | 1,206 | ||||||||||||
| Gross deferred tax assets | 161,712 | 77,663 | ||||||||||||
| Less: Valuation allowance | (94,363) | (6,854) | ||||||||||||
| Net deferred tax assets | 67,349 | 70,809 | ||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Right-of-use asset under operating leases | 32,240 | 27,306 | ||||||||||||
| Intangible assets | 38,867 | 64,091 | ||||||||||||
| Other | — | 639 | ||||||||||||
| Total deferred tax liabilities | 71,107 | 92,036 | ||||||||||||
| Net deferred tax liabilities | $ | 3,758 | $ | 21,227 | ||||||||||
As of December 31, 2025, we had a valuation allowance against net deferred tax assets that were not realizable on a more-likely-than-not basis. The increase in the valuation allowance in 2025 and 2024 was primarily related to the increase in net operating loss carryforwards in the U.S.
As of December 31, 2025, we had federal, state and foreign net operating losses of $161.1 million, $127.0 million, and $161.0 million respectively. Federal net operating losses can be carried forward indefinitely along with the majority of the balance of state and foreign tax losses.
We are required to pay income taxes and are subject to potential examination in our locations of operations, including in the U.S. and in certain U.S. states. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws. Our tax years remain open for examination by all tax authorities since inception. We have not identified any uncertain tax positions or recorded any liabilities, or any associated interest or penalties for the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Feb 29, 2024 | |
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.