UWM Holdings CorpUWMC
UWM Holdings Corp Income Taxes Disclosure
INCOME TAXES
Income Tax Provision (Benefit)
Earnings (loss) before income taxes of the Company are related to operations within the United States, and no component of the Company's earnings are related to foreign operations. The following table details the Company's provision (benefit) for income taxes for the years ended December 31, 2025, 2024, and 2023:
| For the year ended December 31, | |||||||||||||||||
(in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current income tax expense: | |||||||||||||||||
| Federal | $ | — | $ | 2 | $ | 31 | |||||||||||
| State | 121 | 1,242 | 64 | ||||||||||||||
| Total current income tax expense | 121 | 1,244 | 95 | ||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||
| Federal | 5,421 | 734 | (4,798) | ||||||||||||||
| State | 1,331 | 4,604 | (1,808) | ||||||||||||||
Total deferred income tax expense (benefit) | 6,752 | 5,338 | (6,606) | ||||||||||||||
Total provision (benefit) for income taxes | $ | 6,873 | $ | 6,582 | $ | (6,511) | |||||||||||
The following table provides a reconciliation of the statutory federal income tax expense (benefit) to the income tax expense (benefit) from continuing operations:
| For the year ended December 31, | |||||||||||||||||||||||||||||||||||
(in thousands) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| Income tax expense (benefit) at the federal statutory rate | $ | 52,688 | 21.0 | % | $ | 70,551 | 21.0 | % | $ | (16,022) | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal income tax effect (a) | 1,360 | 0.5 | 5,746 | 1.7 | (1,302) | 1.7 | |||||||||||||||||||||||||||||
Nontaxable or nondeductible items | 228 | 0.1 | (1,209) | (0.4) | 1,113 | (1.5) | |||||||||||||||||||||||||||||
Other adjustments | |||||||||||||||||||||||||||||||||||
Income (loss) attributable to non-controlling interest | (45,709) | (18.2) | (67,205) | (20.0) | 11,876 | (15.6) | |||||||||||||||||||||||||||||
Partnership allocations | (1,049) | (0.4) | (1,006) | (0.3) | (2,036) | 2.7 | |||||||||||||||||||||||||||||
Other | (645) | (0.3) | % | (295) | (0.1) | % | (140) | 0.2 | % | ||||||||||||||||||||||||||
| Total income tax expense (benefit) | $ | 6,873 | 2.7 | % | $ | 6,582 | 1.9 | % | $ | (6,511) | 8.5 | % | |||||||||||||||||||||||
(a) State income taxes in California, Michigan, and New York made up the majority (greater than 50%) of the tax effect in this category. | |||||||||||||||||||||||||||||||||||
The Company’s income tax expense (benefit) varies from the expense (benefit) that would be expected based on statutory rates due primarily to its legal entity structure. UWM and Holdings LLC are treated as pass-through entities for federal
and most state and local income tax jurisdictions, while UWMC is treated as a taxable corporation. As such, UWM and Holdings LLC are generally not subject to federal or most state and local incomes taxes, while UWMC is subject to tax on its allocable share of the taxable income or loss generated by these entities.
Deferred Tax Assets and Liabilities
The following table details the components of temporary differences that give rise to deferred tax assets and liabilities:
| December 31, | |||||||||||
(in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
Investment in partnership | $ | 35,631 | $ | — | |||||||
| Net operating losses | 35,266 | 20,365 | |||||||||
| Tax receivable agreement - imputed interest | 12,111 | 4,213 | |||||||||
| Other | 5,694 | 1,768 | |||||||||
| Gross deferred tax assets | 88,702 | 26,346 | |||||||||
| Valuation allowance | (83) | (26) | |||||||||
| Total deferred tax assets, net of valuation allowance | 88,619 | 26,320 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Investment in partnership | — | (13,722) | |||||||||
| Other | (7,213) | (4,810) | |||||||||
| Total deferred tax liabilities | (7,213) | (18,532) | |||||||||
| Net deferred tax assets (liabilities) | $ | 81,406 | $ | 7,788 | |||||||
As of December 31, 2025, the Company had tax-effected federal net operating loss carryforwards of $32.4 million and state and local net operating loss carryforwards of $2.8 million. If not utilized, the state and local net operating loss carryforwards will begin to expire in 2031. The federal net operating loss carryforwards can be carried forward indefinitely.
Income Taxes Paid or Refunded
The following table details the Company’s income taxes paid (net of refunds) for the years ended December 31, 2025, 2024, and 2023:
| For the year ended December 31, | |||||||||||||||||
(in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Federal | $ | — | $ | 1,300 | $ | (118) | |||||||||||
State (a) | 914 | 1,684 | 62 | ||||||||||||||
Total income taxes paid (net of refunds) | $ | 914 | $ | 2,984 | $ | (56) | |||||||||||
(a) Income taxes paid (net of refunds) within the separate state jurisdictions in which the Company made payments (or received refunds) either did not exceed 5% of total income taxes paid (net of refunds) or were immaterial. | |||||||||||||||||
Other
The Company had no unrecognized tax benefits, and as such no interest or penalties were recognized in income tax expense. As of December 31, 2025, tax years 2022 and forward are subject to examination by the tax authorities in federal and state jurisdictions, with certain exceptions for state jurisdictions with longer statute of limitation periods.
Tax Receivable Agreement
The Company’s acquisition of additional units of Holdings LLC by means of an Exchange Transaction is expected to produce, and has produced, net favorable tax effects. Each Exchange Transaction results in the Company acquiring an incremental ownership percentage of the net assets of Holdings LLC along with the temporary differences that give rise to deferred tax assets and liabilities, as well as additional tax basis in such net assets arising from the income tax treatment of each Exchange Transaction. This additional tax basis may reduce the amounts that the Company would otherwise be required to pay to federal, state, or local tax authorities in the future. To the extent that the Company’s future tax obligations are reduced, the Company will be obligated to make payments under the TRA, as discussed in Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies. The amount of the TRA liability, as well as the timing of payments related to the TRA liability, is an estimate and is subject to significant assumptions regarding the amount and timing of future taxable income.
During 2025, as a result of Exchange Transactions, the Company acquired 108,849,478 units in Holdings LLC for an equivalent number of shares of the Company’s Class B common stock, all of which was immediately converted into shares of Class A common stock. This resulted in a net increase in the Company’s net deferred tax assets in the amount of $80.4 million, and an increase in the TRA liability in the amount of $115.4 million. The offsetting amount was recorded as an adjustment to equity. During 2024, as a result of Exchange Transactions, the Company acquired 61,737,689 units in Holdings LLC for an equivalent number of shares of the Company’s Class B common stock, all of which was immediately converted into shares of Class A common stock. This resulted in a net decrease in the Company’s net deferred tax liability in the amount of $42.1 million, and an increase in the TRA liability in the amount of $63.0 million. The offsetting amount was recorded as an adjustment to equity.
As of December 31, 2025 and December 31, 2024, the Company had recognized a liability arising from the TRA of $196.9 million and $78.5 million, respectively. Payments in the amount of $0.2 million were made to SFS Corp. pursuant to the TRA during the year ended December 31, 2025. No payments were made to SFS Corp. pursuant to the TRA during the year ended December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 22, 2021 | |
| 2019 | Mar 27, 2020 | |
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.