Sixth Street Specialty Lending, Inc. Income Taxes Disclosure

12. Income Taxes

Note: Taxable income is an estimate and is not fully determined until the Company’s tax return is filed. The Company’s tax year changed from March 31 to December 31 during calendar year 2024.

Taxable income generally differs from increase in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized.

The Company makes certain adjustments to the classification of stockholders’ equity as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or distributable earnings, as appropriate. In addition, due to the Company’s differing fiscal, tax, and excise tax year ends, the best estimates available are recorded to the above accounts in the period that such differences arise or are identifiable.

During the period January 1, 2025 through December 31, 2025, the Company increased distributable earnings and decreased additional paid in capital by $6.3 million which was primarily attributable to U.S. federal excise taxes and other taxes.

During the period January 1, 2024 through December 31, 2024, the Company increased distributable earnings and decreased additional paid in capital by $3.8 million which was primarily attributable to U.S. federal excise taxes.

During the period April 1, 2023 through December 31, 2023, the Company increased distributable earnings and decreased additional paid in capital by $1.9 million which was primarily attributable to U.S. federal excise taxes.

The Company’s wholly-owned subsidiary, Sixth Street SL Holding, LLC, is a taxable subsidiary in which the Company holds certain equity investments. Sixth Street SL Holding, LLC is not consolidated for U.S. federal income tax purposes and may generate income tax expense as a result of its ownership of certain portfolio companies. The income tax expense, or benefit, and the related tax assets and liabilities, if any, are reflected in our Statement of Operations.

As of December 31, 2025, the Company had a deferred tax liability of $4.6 million pertaining to net unrealized gains, related to seven of its investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.6 million pertaining to operating losses. The Company recorded a deferred tax benefit of $0.5 million for the year ended December 31, 2025.

As of December 31, 2024, the Company had a deferred tax liability of $5.2 million pertaining to net unrealized gains, related to eight of its investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.6 million pertaining to operating losses. The Company recorded a current tax expense of $0.2 million and a deferred tax expense of $2.6 million for the year ended December 31, 2024.

As of December 31, 2023, the Company had a deferred tax liability of $2.8 million pertaining to net unrealized gains, related to seven of its investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.9 million pertaining to operating losses. The Company recorded a current tax expense of $0.1 million and a deferred tax benefit of $0.6 million for the year ended December 31, 2023.

The tax cost of the Company’s investments as of December 31, 2025 was $3,332,367, resulting in estimated gross unrealized gains and losses of $219,540 and $231,975, respectively. The tax cost of the Company’s investments as of December 31, 2024 was $3,535,963, resulting in estimated gross unrealized gains and losses of $207,435 and $216,975, respectively. The tax cost of the Company’s investments as of December 31, 2023 was $3,256,630, resulting in estimated gross unrealized gains and losses of $159,281 and $135,606, respectively.

To the extent that the Company determines that its estimated current year annual taxable income will exceed its estimated current year dividends from such taxable income, the Company accrues excise tax on estimated excess taxable income. For the year ended December 31, 2025, December 31, 2024 and December 31, 2023, a net expense of $5.3 million, $3.8 million and $2.3 million, respectively, was recorded for U.S. federal excise tax.