Vroom, Inc. Income Taxes Disclosure

18. Income Taxes

Income Tax Provision

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. OBBBA includes, among other provisions, changes affecting (i) the deductibility and/or amortization of domestic research or experimental expenditures for taxable years beginning after December 31, 2024, (ii) the timing and availability of certain clean energy tax incentives (including an accelerated phase-out for certain credits for projects beginning after June 30, 2026), and (iii) certain international tax rules impacting foreign income and the calculation of Foreign-Derived Intangible Income (“FDII”), among other cross-border considerations. The Company evaluated the relevant provisions of OBBBA and determined that OBBA did not have a material impact on the Company’s consolidated financial statements.

Tax Rate Reconciliation

The Company’s effective tax rate from continuing operations for the years ended December 31, 2025 and 2024 was (0.56)% and (0.52)%, respectively.

Deferred Tax Assets (Liabilities)

The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statements and the income tax basis of assets and liabilities. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that certain deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those specific jurisdictions prior to the dates on which such net operating losses expire. The Company maintained a full valuation allowance against its net deferred tax assets because the Company has determined that it is more likely than not that these assets will not be fully realized based on a current evaluation of expected future taxable income and the Company being in a cumulative 3-year loss position.

As of December 31, 2025, 2024, and 2023, the consolidated valuation allowance balance for both continuing and discontinued operations was $398.2 million, $400.2 million and $358.7 million, respectively. The consolidated change in valuation allowance for both continuing and discontinued operations included additions of $30.3 million and $6.4 million for federal and state valuation adjustments, partially offset by Section 108 tax attribute reductions of $37.7 million and $1.0 million change in deferred assets for the year ended December 31, 2025. The consolidated change in valuation allowance for both continuing and discontinued operations was $41.5 million for the year ended December 31, 2024.

Net Operating Losses

As of December 31, 2025, the Company had total net operating loss carryforwards for U.S. federal income tax purposes of $1,618.0 million, of which $168.5 million expire from 2028 through 2037 and $1,449.5 million do not expire. The Company has net operating loss carryforwards for state income tax purposes of $901.7 million, which expire from 2034 through 2043.

The Company is subject to tax in the United States and many state and local jurisdictions. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. federal, state and local for tax years 2019 and prior. The company is not currently under audit for any US federal or state income tax audits.

The Internal Revenue Code (“IRC”) Section 382 provides for a limitation of the annual use of net operating loss and tax credit carryforwards following certain ownership changes (as defined by the IRC Section 382). The Company completed a Section 382 study and determined that the Company has undergone five ownership changes, the most recent of which occurred on the Effective Date. The IRC Section 382 limitations arising as a result of these ownership changes generally limit the use of the net operating losses generated before the applicable ownership change. However, an exception to the IRC Section 382 limitation applies when, among other requirements, so-called “qualified creditors” and shareholders of a corporation in a title 11 Case receive, in respect of their claims and interests, as applicable, at least 50% of the vote and value of the stock of the corporation pursuant to a confirmed chapter 11 plan (the “382(l)(5) Exception”). The Company expects that the 382(l)(5) Exception applied to the ownership change occurring on the

Effective Date and, accordingly, that the Company may not have any limitation on its utilization of federal NOL carryforwards generated prior to emergence from the Prepackaged Chapter 11 Case (other than limitations which existed before the commencement of the Prepackaged Chapter 11 Case). However, the Company may be limited in its utilization of its federal NOL carryforwards generated before the Effective Date if it triggers another ownership change within two years after the Effective Date.

On the Effective Date, the Company consummated its Prepackaged Chapter 11 Case. For US tax purposes the Company would be required to recognize cancellation of debt income (“CODI”) in the amount equal to the excess of the adjusted issue price of the debt discharged over the value of any new debt or equity that was issued. However, IRC Section 108 provides that CODI may be excluded from gross income to the extent that the debt is discharged in a title 11 Case. In lieu of recognizing CODI, IRC Section 108 requires the Company to reduce its tax attributes, including net operating losses, capital losses, tax credits, depreciable assets, investment in subsidiaries and other investments, in the amount of the CODI that is excluded from gross income.

Uncertain Tax Positions

The Company has not identified any uncertain tax positions as of December 31, 2025 or 2024. Any interest and penalties related to uncertain tax positions shall be recorded as a component of income tax expense. To date, no interest or penalties have been accrued in relation to uncertain tax positions.