United Airlines Holdings, Inc.UAL
United Airlines Holdings, Inc. Income Taxes Disclosure
INCOME TAXES
The income tax provision differed from amounts computed at the statutory federal income tax rate and consisted of the following significant components for the years ended December 31 (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Income tax provision at statutory rate | $ | 904 | 21.0 | % | $ | 875 | 21.0 | % | $ | 711 | 21.0 | % | |||||||||||||||||
| State income tax provision, net of federal income tax benefit (a) | 74 | 1.7 | % | 59 | 1.4 | % | 37 | 1.1 | % | ||||||||||||||||||||
| Change in valuation allowance | (68) | (1.6) | % | 27 | 0.6 | % | (24) | (0.7) | % | ||||||||||||||||||||
| Nontaxable or nondeductible items | 27 | 0.6 | % | 48 | 1.2 | % | 39 | 1.1 | % | ||||||||||||||||||||
| Other, net | 16 | 0.4 | % | 10 | 0.2 | % | 6 | 0.2 | % | ||||||||||||||||||||
| Income tax expense | $ | 953 | 22.1 | % | $ | 1,019 | 24.4 | % | $ | 769 | 22.7 | % | |||||||||||||||||
(a) California and Colorado make up more than 50% of the state income tax expense category in 2025. California, Colorado and Illinois make up more than 50% of the state income tax expense category in 2024 and 2023 | |||||||||||||||||||||||||||||
The components of the income tax provision consisted of the following for the years ended December 31 (in millions):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Current: | ||||||||||||||||||||
| US Federal | $ | (4) | $ | 50 | $ | — | ||||||||||||||
| US State and Local | 20 | 28 | 8 | |||||||||||||||||
| Foreign | 12 | 6 | 5 | |||||||||||||||||
| Total Current | 28 | 84 | 13 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| US Federal | 866 | 898 | 726 | |||||||||||||||||
| US State and Local | 58 | 37 | 30 | |||||||||||||||||
| Total Deferred | 925 | 935 | 756 | |||||||||||||||||
| Total income tax expense: | ||||||||||||||||||||
| US Federal | 862 | 948 | 726 | |||||||||||||||||
| US State and Local | 79 | 65 | 38 | |||||||||||||||||
| Foreign | 12 | 6 | 5 | |||||||||||||||||
| Total Income Tax Expense | $ | 953 | $ | 1,019 | $ | 769 | ||||||||||||||
The following table presents tax payment, net of refunds, by jurisdiction for the years ended December 31 (in million):
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Federal | $ | 33 | $ | 47 | $ | 1 | ||||||||||||||
| State | ||||||||||||||||||||
| California | 13 | 25 | (4) | |||||||||||||||||
| Illinois | 2 | 5 | 3 | |||||||||||||||||
| All other state | 2 | 4 | 2 | |||||||||||||||||
| Foreign | ||||||||||||||||||||
| Guatemala | 3 | 3 | 3 | |||||||||||||||||
| India | 3 | 2 | 1 | |||||||||||||||||
| All other foreign | 6 | 2 | 1 | |||||||||||||||||
| Total | $ | 62 | $ | 88 | $ | 7 | ||||||||||||||
Temporary differences and carryforwards that give rise to deferred tax assets and liabilities as of December 31 were as follows (in millions):
| UAL | United | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Deferred income tax asset (liability): | ||||||||||||||||||||||||||
| Federal and state net operating loss ("NOL") carryforwards | $ | 2,326 | $ | 2,149 | $ | 2,298 | $ | 2,119 | ||||||||||||||||||
| Deferred revenue | 1,894 | 1,865 | 1,894 | 1,865 | ||||||||||||||||||||||
| Operating lease liabilities | 1,349 | 1,110 | 1,349 | 1,110 | ||||||||||||||||||||||
| Employee benefits, including pension, postretirement and medical | 701 | 608 | 701 | 608 | ||||||||||||||||||||||
| Other financial liabilities | 478 | 517 | 478 | 517 | ||||||||||||||||||||||
| Interest expense carryforward | 109 | 467 | 109 | 467 | ||||||||||||||||||||||
| Other | 377 | 565 | 375 | 565 | ||||||||||||||||||||||
| Less: Valuation allowance | (151) | (208) | (151) | (208) | ||||||||||||||||||||||
| Total deferred tax assets | $ | 7,083 | $ | 7,073 | $ | 7,053 | $ | 7,043 | ||||||||||||||||||
| Depreciation | $ | (7,814) | $ | (7,171) | $ | (7,814) | $ | (7,171) | ||||||||||||||||||
| Operating lease right-of-use asset | (1,116) | (863) | (1,116) | (863) | ||||||||||||||||||||||
| Intangible assets | (616) | (619) | (616) | (619) | ||||||||||||||||||||||
| Total deferred tax liabilities | $ | (9,546) | $ | (8,653) | $ | (9,546) | $ | (8,653) | ||||||||||||||||||
| Net deferred tax asset (liability) | $ | (2,463) | $ | (1,580) | $ | (2,493) | $ | (1,610) | ||||||||||||||||||
United and its domestic consolidated subsidiaries file a consolidated federal income tax return with UAL. Under an intercompany tax allocation policy, United and its subsidiaries compute, record and pay UAL for their own tax liabilities as if they were separate companies filing separate returns. In determining their own tax liabilities, United and each of its subsidiaries take into account all tax credits or benefits generated and utilized as separate companies and they are each compensated for the aforementioned tax benefits on an annual basis.
The Company's federal and state NOL and tax credit carryforwards relate to prior years' NOLs and credits, which may be used to reduce tax liabilities in future years. These tax benefits are mostly attributable to federal pre-tax NOL carryforwards of $10.6 billion ($2.2 billion tax effected) for UAL as of December 31, 2025. If not utilized, $0.1 billion of these federal pre-tax NOLs will expire in 2029. The remaining $10.5 billion of NOLs have no expiration date. State pre-tax NOLs of $2.8 billion ($0.2 billion tax effected) as of December 31, 2025 expire over a 1 to 20-year period. As of December 31, 2025, state tax credits were $57 million. These credits will expire over a 1 to 15-year period, and an additional $5.5 million of state tax credits have no expiration date.
As of December 31, 2025, the Company has recorded $108 million of valuation allowance against its capital loss deferred tax assets. Capital losses have a limited carryforward period of five years, and they can be utilized only to the extent of capital gains. The Company does not anticipate generating sufficient capital gains to utilize the losses before they expire, therefore, a valuation allowance is necessary as of December 31, 2025. Additionally, the Company recorded a valuation allowance of $44 million on certain state deferred tax assets primarily due to state NOLs that have short expiration periods.
The Company's unrecognized tax benefits related to uncertain tax positions were $74 million, $70 million and $66 million at December 31, 2025, 2024 and 2023, respectively. All of the uncertain tax positions would affect the Company's effective tax rate if recognized. Changes in unrecognized tax benefits were immaterial during 2025, 2024 and 2023. There are no material amounts included in the balance at December 31, 2025 for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company's federal income tax returns for tax years after 2000 remain subject to examination by the Internal Revenue Service and state taxing jurisdictions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 18, 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.