TG THERAPEUTICS, INC. Income Taxes Disclosure
NOTE 9 – INCOME TAXES
The components of net income before taxes are as follows:
| For the year ended December 31, | ||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||
| Domestic | $ | 107,739 | $ | 26,470 | $ | 13,583 | ||||||
| Foreign | (349 | ) | (876 | ) | (521 | ) | ||||||
| Net income before taxes | $ | 107,390 | $ | 25,594 | $ | 13,062 | ||||||
Income tax (benefit) expense consists of the following:
| For the year ended December 31, | ||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||
| Current: | ||||||||||||
| Federal | $ | — | $ | — | $ | — | ||||||
| State | 8,211 | 2,211 | 390 | |||||||||
| Foreign | — | — | — | |||||||||
| Total current tax expense | $ | 8,211 | $ | 2,211 | $ | 390 | ||||||
| Deferred: | ||||||||||||
| Federal | $ | (335,077 | ) | $ | — | $ | — | |||||
| State | (12,923 | ) | — | — | ||||||||
| Foreign | — | — | — | |||||||||
| Total deferred tax (benefit) expense | $ | (348,000 | ) | $ | — | $ | — | |||||
| Income tax (benefit) expense | $ | (339,789 | ) | $ | 2,211 | $ | 390 | |||||
The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022. The IRA provided for a Corporate Alternative Minimum Tax (“Corp AMT”), applicable to tax years beginning after December 31, 2022. The Corp AMT will impose a 15% tax on companies with adjusted financial statement income of over $1 billion for U.S. based organizations. At this time, it is not anticipated that the Corp AMT will be applicable for the Company.
On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was enacted in the United States. Among other changes, the OBBBA modifies key business tax provisions, including restoring 100% bonus depreciation under Section 168(k), reverting to the higher, EBITDA-based, business interest expense limitation under Section 163(j) and reinstatement of expensing domestic research and development costs including those previously capitalized under Section 174.
Beginning in 2025 annual reporting, the Company adopted ASU 2023-09 prospectively. See Note 1 - Organization and Summary of Significant Accounting Policies - Recently Issued Accounting Standards for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate for the year ending December 31, 2025 is as follows:
| For the Year Ended | ||||||||
| December 31, 2025 | ||||||||
| (in thousands) | Tax Effect | Effective Tax Rate | ||||||
| U.S. federal statutory income tax rate | $ | 22,552 | 21.0 | % | ||||
| State and local income tax, net of federal income tax effect | (6,440 | ) | (6.0 | )% | ||||
| Tax credits: | ||||||||
| Research and development (R&D) tax credit | (7,352 | ) | (6.8 | )% | ||||
| Changes in valuation allowance | (357,904 | ) | (333.3 | )% | ||||
| Nontaxable or nondeductible items: | ||||||||
| Officer compensation limit | 6,213 | 5.8 | % | |||||
| Excess tax benefit on stock-based compensation | (8,118 | ) | (7.6 | )% | ||||
| Other | 324 | 0.3 | % | |||||
| Other adjustments: | ||||||||
| Limitation to tax attribute utilization | 9,477 | 8.8 | % | |||||
| Other | 1,459 | 1.4 | % | |||||
| Tax effect and effective tax rate | $ | (339,789 | ) | (316.4 | )% | |||
Income tax expense differed from amounts computed by applying the US federal income tax rate of 21% for the years ending December 31, 2024 and 2023, to pretax income as follows:
| For the year ended December 31, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Income before income taxes, as reported in the consolidated statements of operations | $ | 25,594 | $ | 13,062 | ||||
| | | | ||||||
| Computed “expected” tax benefit | $ | 5,375 | $ | 2,743 | ||||
| | ||||||||
| Increase (decrease) in income taxes resulting from: | ||||||||
| State and local taxes | 780 | (700 | ) | |||||
| Research and development credits | (4,637 | ) | (3,402 | ) | ||||
| Officer Compensation Limitation | 2,164 | (740 | ) | |||||
| Provision-to-return | 11,733 | (9,235 | ) | |||||
| Prior period state tax benefit | (3,508 | ) | — | |||||
| Other | 646 | 245 | ||||||
| Stock options | (1,602 | ) | (10,616 | ) | ||||
| Change in state tax rates | (4,970 | ) | 4,141 | |||||
| Change in the balance of the valuation allowance for deferred tax assets | (3,770 | ) | 17,954 | |||||
| | $ | 2,211 | $ | 390 | ||||
Cash paid for income taxes, net of refunds received, by jurisdiction for the years ended December 31, 2025 are as follows:
| For the year ended December 31, | ||||
| (in thousands) | 2025 | |||
| Federal | $ | 300 | ||
| State: | ||||
| California | 710 | |||
| Kentucky | 1,100 | |||
| Mississippi | 500 | |||
| Tennessee | 4,519 | |||
| Other | 750 | |||
| Foreign | — | |||
| Cash paid for income taxes, net of refunds received | $ | 7,879 | ||
Our deferred tax assets (liabilities) are as follows:
| (in thousands) | 2025 | 2024 | ||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $275,710 | $294,046 | ||||||
| Research and development credit | 58,045 | 50,693 | ||||||
| Noncash compensation | 15,400 | 12,267 | ||||||
| Capitalized R&D Expenses | 14,753 | 49,681 | ||||||
| Other | 27,966 | 10,335 | ||||||
| Gross deferred tax assets | 391,874 | 417,022 | ||||||
| Deferred tax liabilities: | ||||||||
| Other | (3,897 | ) | (2,408 | ) | ||||
| Net deferred tax assets, excluding valuation allowance | 387,977 | 414,614 | ||||||
| Less valuation allowance | (39,977 | ) | (414,614 | ) | ||||
| Net deferred tax assets | $ | 348,000 | $ | — | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 15, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 15, 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.