TransUnionTRU
TransUnion Income Taxes Disclosure
Income Taxes
The provision for income taxes consisted of the following:
Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Federal | |||||||||||||||||
Current | $ | 84.3 | $ | 130.3 | $ | 100.0 | |||||||||||
Deferred | (24.6) | (122.3) | (102.1) | ||||||||||||||
State | |||||||||||||||||
Current | 20.6 | 24.9 | 11.1 | ||||||||||||||
Deferred | (7.8) | (18.7) | (28.3) | ||||||||||||||
Foreign | |||||||||||||||||
Current | 97.0 | 100.9 | 96.3 | ||||||||||||||
Deferred | 3.6 | (16.3) | (32.3) | ||||||||||||||
Provision for income taxes | $ | 173.1 | $ | 98.8 | $ | 44.7 | |||||||||||
The components of income before income taxes consisted of the following:
Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Domestic | $ | 288.1 | $ | 9.7 | $ | (40.6) | |||||||||||
Foreign | 354.9 | 391.4 | (104.7) | ||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 643.0 | $ | 401.1 | $ | (145.3) | |||||||||||
As discussed in Note 1, “Significant Accounting Policies,” we prospectively adopted the income tax disclosure improvements ASU for the year ended December 31, 2025. Accordingly, disclosures for the years ended December 31, 2024 and 2023 have not been recast to conform to the new presentation requirements.
The effective income tax rate reconciliation consisted of the following:
Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
U.S. federal statutory rate | $ | 135.0 | 21.0 | % | |||||||
Total state and local income taxes1 | 12.0 | 1.9 | % | ||||||||
Foreign tax effects: | |||||||||||
Canada: | |||||||||||
Provincial tax | 8.6 | 1.3 | % | ||||||||
Other | (0.3) | (0.1) | % | ||||||||
India: | |||||||||||
Statutory rate difference | 6.8 | 1.1 | % | ||||||||
Other | 6.3 | 1.0 | % | ||||||||
All other foreign jurisdictions | 12.6 | 2.0 | % | ||||||||
Effect of cross-border tax laws: | |||||||||||
Other | (0.8) | (0.1) | % | ||||||||
Tax credits: | |||||||||||
Research and development tax credits | (6.0) | (0.9) | % | ||||||||
Foreign tax credit | (7.6) | (1.2) | % | ||||||||
Changes in valuation allowances | 3.0 | 0.4 | % | ||||||||
Nontaxable or nondeductible items: | |||||||||||
Nondeductible compensation | 11.1 | 1.7 | % | ||||||||
Benefit to legal and regulatory expenses | (11.8) | (1.8) | % | ||||||||
Other | (0.1) | — | % | ||||||||
Changes in unrecognized tax benefits | 3.0 | 0.5 | % | ||||||||
Other adjustments | 1.3 | 0.1 | % | ||||||||
Total | $ | 173.1 | 26.9 | % | |||||||
1.State taxes in California and Virginia made up the majority (greater than 50%) of the tax effect in this category.
Years Ended December 31, | ||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||
Income taxes at statutory rate | $ | 84.2 | 21.0 | % | $ | (30.5) | 21.0 | % | ||||||||||||||||||
Increase (decrease) resulting from: | ||||||||||||||||||||||||||
State taxes, net of federal benefit | 0.1 | — | % | (21.9) | 15.1 | % | ||||||||||||||||||||
Foreign rate differential | (6.7) | (1.7) | % | (22.5) | 15.5 | % | ||||||||||||||||||||
Excess tax (benefits) / expense on stock-based compensation | (1.5) | (0.4) | % | 3.0 | (2.0) | % | ||||||||||||||||||||
Uncertain tax positions | 6.0 | 1.5 | % | 7.5 | (5.2) | % | ||||||||||||||||||||
Valuation allowances | (11.3) | (2.8) | % | 3.1 | (2.1) | % | ||||||||||||||||||||
Foreign withholding taxes | 13.7 | 3.4 | % | 13.0 | (8.9) | % | ||||||||||||||||||||
U.S. federal tax on foreign earnings | 13.6 | 3.4 | % | 0.2 | (0.1) | % | ||||||||||||||||||||
U.S. federal R&D tax credit | (8.1) | (2.0) | % | (8.6) | 5.9 | % | ||||||||||||||||||||
| Nondeductible expenses | 14.9 | 3.7 | % | 6.8 | (4.7) | % | ||||||||||||||||||||
Nondeductible goodwill impairment | — | — | % | 97.3 | (67.0) | % | ||||||||||||||||||||
Other | (6.1) | (1.5) | % | (2.7) | 1.7 | % | ||||||||||||||||||||
Total | $ | 98.8 | 24.6 | % | $ | 44.7 | (30.8) | % | ||||||||||||||||||
For 2025, we reported a 26.9% effective tax rate, which is higher than the 21.0% U.S. federal corporate statutory rate, due primarily to the impact of the foreign rate differential, nondeductible expenses mainly in connection with executive compensation limitations, and state taxes, partially offset by the impact of the benefit to legal and regulatory expenses from the reduction of an accrued liability to zero for the dismissal of a lawsuit previously treated as nondeductible.
For 2024, we reported a 24.6% effective tax rate, which is higher than the 21.0% U.S. federal corporate statutory rate due primarily to nondeductible expenses primarily in connection with executive compensation limitations, foreign withholding taxes, and uncertain tax positions, partially offset by benefits from the research and development credit and the foreign rate differential. In addition, certain deferred tax assets related to expiring foreign tax credits were written off with an offsetting reduction of the valuation allowance.
For 2023, we reported a (30.8)% effective tax rate, which is lower than the 21.0% U.S. federal corporate statutory rate due primarily to the impact of non-deductible goodwill impairment partially offset by benefits on the remeasurement of deferred taxes due to changes in state apportionment rates.
Components of net deferred income tax consisted of the following:
| December 31, 2025 | December 31, 2024 | ||||||||||
Deferred income tax assets: | |||||||||||
Compensation | $ | 23.5 | $ | 20.7 | |||||||
Employee benefits | 29.1 | 33.6 | |||||||||
Legal reserves and settlements | 14.7 | 10.4 | |||||||||
Loss and tax credit carryforwards | 253.8 | 293.0 | |||||||||
Leases | 14.2 | 15.2 | |||||||||
| Section 174 R&D Expense | 120.2 | 88.6 | |||||||||
Other | 34.2 | 35.1 | |||||||||
Gross deferred income tax assets | $ | 489.7 | $ | 496.6 | |||||||
Valuation allowance | (80.3) | (93.4) | |||||||||
Total deferred income tax assets, net | $ | 409.4 | $ | 403.2 | |||||||
Deferred income tax liabilities: | |||||||||||
Depreciation and amortization | (730.2) | (718.0) | |||||||||
Right of use asset | (13.8) | (14.6) | |||||||||
Taxes on unremitted foreign earnings | (34.7) | (25.2) | |||||||||
Cash flow hedges | (5.0) | (27.6) | |||||||||
Other | (4.9) | (23.0) | |||||||||
Total deferred income tax liability | $ | (788.6) | $ | (808.4) | |||||||
Net deferred income tax liability | $ | (379.2) | $ | (405.2) | |||||||
Deferred tax assets and liabilities result from temporary differences between tax and accounting methods. Our balance sheet includes deferred tax assets of $10.6 million and $10.1 million at December 31, 2025 and 2024, respectively, which are included in other assets.
If certain deferred tax assets are not likely recoverable in future years a valuation allowance is recorded. As of December 31, 2025 and 2024, a valuation allowance of $80.3 million and $93.4 million, respectively, reduced deferred tax assets related to worldwide net operating losses and tax credit carryforwards. Our estimate of the amount of the deferred tax asset we can realize requires significant assumptions about projected revenues and income that are impacted by future market and economic conditions. Our carryforwards will expire as follows: U.S. federal net operating loss carryforwards over two years to an indefinite number of years, foreign loss carryforwards over one year to an indefinite number of years, foreign tax credit carryforwards over ten years, interest expense carryforwards over an indefinite number of years, state net operating loss carryforwards over one year to an indefinite number of years and state tax credit carryforwards over one year to an indefinite number of years. As of December 31, 2025, the deferred tax assets associated with U.S. foreign tax credit carryforwards and U.S. federal net operating loss carryforwards were $44.1 million and $5.9 million, respectively. Deferred tax assets associated with foreign net operating loss carryforwards and foreign interest expense carryforwards were $17.8 million and $55.8 million, respectively. Deferred tax assets associated with U.S. federal and state interest expense carryforwards is $108.2 million. Deferred tax assets associated with other loss and tax credit carryforwards were not significant.
The total amount of gross unrecognized tax benefits consisted of the following:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
Balance as of beginning of period | $ | 44.4 | $ | 45.0 | $ | 45.1 | |||||||||||
Increase in tax positions of prior years | 0.1 | 0.8 | 2.2 | ||||||||||||||
Decrease in tax positions of prior years | (0.2) | (1.0) | (3.4) | ||||||||||||||
Increase in tax positions of current year | 3.4 | 3.3 | 3.0 | ||||||||||||||
Reductions relating to settlement and lapse of statute | (3.5) | (3.7) | (1.9) | ||||||||||||||
Decrease in tax positions due to acquisition | 0.1 | — | — | ||||||||||||||
Balance as of end of period | $ | 44.3 | $ | 44.4 | $ | 45.0 | |||||||||||
The amounts that would affect the effective tax rate if recognized are $33.8 million, $34.4 million and $34.5 million, respectively, for the years ended December 31, 2025, 2024 and 2023.
We classify interest and penalties as income tax expense in the Consolidated Statements of Operations and their associated liabilities as other liabilities in the Consolidated Balance Sheets. Interest and penalties on unrecognized tax benefits were $21.6 million, $17.7 million and $14.0 million, respectively, for the years ended December 31, 2025, 2024 and 2023.
The total amount of cash taxes paid, net of refunds, by jurisdiction consisted of the following:
Year Ended December 31, | |||||
| 2025 | |||||
Federal | $ | 115.6 | |||
State | 31.5 | ||||
Foreign | |||||
Canada | 23.6 | ||||
India | 54.5 | ||||
Other | 34.5 | ||||
Total | $ | 259.7 | |||
We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits. An estimate of the range of the increase or decrease in unrecognized tax benefits due to audit results cannot be
made at this time. Tax years 2007 and forward remain open for examination in some foreign jurisdictions, 2015 and forward in some state jurisdictions, and 2012 and forward for U.S. federal purposes.
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes potentially significant provisions, such as the
permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax
framework and the restoration of favorable tax treatment for certain business provisions including 100% bonus depreciation,
domestic research cost expensing, and the business interest expense limitation. The OBBBA has multiple effective dates, with
certain provisions effective in 2025 and others implemented periodically through 2027. The impacts of the OBBBA are reflected in our results for the year ended December 31, 2025 resulting in an increase in our provision for income taxes due to foreign inclusions and a decrease in our income taxes paid in 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 15, 2017 | |
| 2015 | Feb 19, 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.