TRUIST FINANCIAL CORPTFC
TRUIST FINANCIAL CORP Income Taxes Disclosure
Income Taxes
The components of the income tax provision or benefit are as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current provision (benefit): | ||||||||||||||||||||
| Federal | $ | 1,052 | $ | (514) | $ | 1,012 | ||||||||||||||
| State and local | 115 | (15) | 135 | |||||||||||||||||
| Current provision (benefit) | 1,167 | (529) | 1,147 | |||||||||||||||||
| Deferred provision (benefit): | ||||||||||||||||||||
| Federal | (168) | 45 | (390) | |||||||||||||||||
| State and local | 43 | (72) | (19) | |||||||||||||||||
| Deferred provision (benefit) | (125) | (27) | (409) | |||||||||||||||||
| Total provision (benefit) for income taxes: | ||||||||||||||||||||
| Federal | 884 | (469) | 622 | |||||||||||||||||
| State and local | 158 | (87) | 116 | |||||||||||||||||
| Provision (benefit) for income taxes | $ | 1,042 | $ | (556) | $ | 738 | ||||||||||||||
The components of income taxes paid are as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 54 | $ | 493 | $ | 538 | ||||||||||||||
| State and local | ||||||||||||||||||||
| California | 26 | * | * | |||||||||||||||||
| New York | 21 | * | * | |||||||||||||||||
| New York City | 17 | * | * | |||||||||||||||||
| North Carolina | 14 | * | * | |||||||||||||||||
| Florida | * | * | 45 | |||||||||||||||||
| Other | 60 | 337 | 197 | |||||||||||||||||
| Total state and local | 138 | 337 | 242 | |||||||||||||||||
| Total income taxes paid | $ | 192 | $ | 830 | $ | 780 | ||||||||||||||
*The amount of income taxes paid during the year did not meet the 5% disaggregation threshold.
A reconciliation of the provision for income taxes at the statutory federal income tax rate to the Company’s actual provision for income taxes and effective tax rate is presented in the following table:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Amount | % of Income Before Taxes | Amount | % of Income Before Taxes | Amount | % of Income Before Taxes | |||||||||||||||||||||||||||||
| Federal income taxes at statutory rate | $ | 1,333 | 21.0 | % | $ | (126) | 21.0 | % | $ | (161) | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal income tax effect(1) | 126 | 2.0 | (61) | 10.1 | 99 | (12.9) | |||||||||||||||||||||||||||||
| Tax credits, net of amortization and other tax benefits | |||||||||||||||||||||||||||||||||||
| Low income housing tax credits | (127) | (2.0) | (111) | 18.5 | (102) | 13.3 | |||||||||||||||||||||||||||||
| Energy related credits | (111) | (1.8) | (93) | 15.5 | (31) | 4.1 | |||||||||||||||||||||||||||||
| New market tax credits | (33) | (0.5) | (32) | 5.3 | (30) | 3.9 | |||||||||||||||||||||||||||||
| Other tax credits | (1) | — | (15) | 2.5 | (11) | 1.4 | |||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Tax-exempt income | (204) | (3.2) | (195) | 32.4 | (203) | 26.5 | |||||||||||||||||||||||||||||
| Nondeductible goodwill | — | — | — | — | 1,276 | (166.8) | |||||||||||||||||||||||||||||
| Internal legal entity restructuring | — | — | — | — | (191) | 25.0 | |||||||||||||||||||||||||||||
| Other | 66 | 1.0 | 79 | (13.1) | 96 | (12.5) | |||||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (7) | (0.1) | (13) | 2.2 | (10) | 1.3 | |||||||||||||||||||||||||||||
| Other adjustments | — | — | 11 | (1.9) | 6 | (0.8) | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | $ | 1,042 | 16.4 | $ | (556) | 92.5 | $ | 738 | (96.5) | ||||||||||||||||||||||||||
(1)For the Year Ended December 31, 2025, state and local taxes in California, New York City, North Carolina, and Florida made up the majority (greater than 50 percent) of the tax effect in this category. For the Year Ended December 31, 2024 state taxes in Tennessee, Georgia, and Florida made up the majority (greater than 50 percent) of the tax effect in this category. For the year ended December 31, 2023 state and local taxes in Florida, New York City, New York, North Carolina, and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.
Deferred income tax assets and liabilities result from differences between the timing of the recognition of assets and liabilities for financial reporting purposes and for income tax purposes. DTAs and DTLs are measured using the enacted federal and state tax rates in the periods in which the DTAs or DTLs are expected to be realized. In the Consolidated Balance Sheets, a net deferred income tax asset is recorded in Other assets and a net deferred income tax liability is recorded in Other liabilities. DTAs and DTLs, net of the federal impact for state taxes, are presented in the following table:
| (Dollars in millions) | Dec 31, 2025 | Dec 31, 2024 | ||||||||||||
| DTAs: | ||||||||||||||
| Net unrealized losses in AOCI | $ | 1,805 | $ | 2,541 | ||||||||||
| ALLL | 1,201 | 1,150 | ||||||||||||
| Employee compensation and benefits | 753 | 705 | ||||||||||||
| Federal and state NOLs and other carryforwards | 599 | 163 | ||||||||||||
| Operating lease liability | 314 | 319 | ||||||||||||
| Accruals and reserves | 233 | 265 | ||||||||||||
| Research or experimental expenditures | 209 | 365 | ||||||||||||
| Other | 14 | 15 | ||||||||||||
| Total gross DTAs | 5,128 | 5,523 | ||||||||||||
| Valuation allowance | (106) | (104) | ||||||||||||
| Total DTAs net of valuation allowance | 5,022 | 5,419 | ||||||||||||
| DTLs: | ||||||||||||||
| Pension | 2,010 | 1,914 | ||||||||||||
| Goodwill and other intangible assets | 392 | 409 | ||||||||||||
| MSRs | 329 | 286 | ||||||||||||
| ROU assets | 254 | 245 | ||||||||||||
| Equipment and auto leasing | 232 | 269 | ||||||||||||
| Loans | 91 | 195 | ||||||||||||
| Other | 207 | 156 | ||||||||||||
| Total DTLs | 3,515 | 3,474 | ||||||||||||
| Net DTA | $ | 1,507 | $ | 1,945 | ||||||||||
The DTAs include certain federal and state NOLs and tax credit carryforwards that will expire, if not utilized, in varying amounts beginning in 2026. The Company had a valuation allowance recorded against certain state NOL carryforwards of $98 million and $104 million at December 31, 2025 and 2024, respectively.
The following table provides a rollforward of the Company’s gross federal and state UTBs, excluding interest and penalties:
| (Dollars in millions) | Dec 31, 2025 | Dec 31, 2024 | ||||||||||||
| Balance, January 1 | $ | 91 | $ | 80 | ||||||||||
| Increases in UTBs related to prior years | 2 | 4 | ||||||||||||
| Decreases in UTBs related to prior years | (7) | — | ||||||||||||
| Increases in UTBs related to the current year | 9 | 27 | ||||||||||||
| Decreases in UTBs related to settlements | (5) | — | ||||||||||||
| Decreases in UTBs related to lapse of the applicable statutes of limitations | (9) | (20) | ||||||||||||
| Balance, December 31 | $ | 81 | $ | 91 | ||||||||||
The amount of UTBs that would favorably affect the Company’s effective tax rate, if recognized, was $65 million and $74 million at December 31, 2025 and 2024, respectively. Interest and penalties related to UTBs are recorded in the Provision for income taxes in the Consolidated Statements of Income. The Company had a gross liability of $16 million and $13 million for interest and penalties related to its UTBs at December 31, 2025 and 2024, respectively. The amount of gross expense related to interest and penalties on UTBs was immaterial.
The Company files U.S. federal, state, and local income tax returns. The Company’s federal income tax returns are no longer subject to assessment by the IRS for taxable years prior to 2022. The IRS is currently examining the Company’s 2022 consolidated federal income tax return. With limited exceptions, the Company is no longer subject to assessment by state and local taxing authorities for taxable years prior to 2020.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Mar 3, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 25, 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.