Clear Secure, Inc.YOU

Clear Secure, Inc. Income Taxes Disclosure

10-KFiled Feb 25, 20268 min read
Income Taxes
The Company is the sole managing member of Alclear, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Alclear is generally not subject to U.S. federal and most state and local income taxes. Any taxable income or loss generated by Alclear is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis. The Company is subject to federal income taxes in the U.S. and its territories, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Alclear, as well as any stand-alone income or loss generated by the Company. The Company is also subject to income taxes in Israel, Argentina, and Mexico.
The components of income tax expense (benefit) are as follows:
For the year ended December 31,
202520242023
Current
Federal$9,182 $2,527 $163 
State4,270 4,633 1,005 
Foreign90 (34)278 
Total current income taxes13,542 $7,126 $1,446 
Deferred
Federal21,149 (128,913)(747)
State3,232 (36,860)25 
Foreign— — — 
Total deferred income taxes24,381 (165,773)(722)
Income tax expense (benefit)$37,923 $(158,647)$724 
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate upon adoption of ASU 2023-09, is as follows:
For the year ended December 31,
202520242023
Tax expense (benefit) at U.S. statutory rate$43,275 21.0 %$13,992 21.0 %$10,629 21.0 %
State taxes1
5,837 2.8 %(25,462)(38.2)%537 1.1 %
Foreign tax effects
95 0.1 %(84)(0.1)%307 0.6 %
Tax credits
Research and development credits
(1,808)(0.9)%(3,113)(4.7)%(2,134)(4.2)%
Changes in valuation allowances
2,252 1.1 %(136,965)(205.6)%(8,244)(16.3)%
Nontaxable or nondeductible items
Stock compensation
(694)(0.3)%3,739 5.6 %2,270 4.4 %
Other
303 0.1 %62 0.1 %28 0.1 %
Changes in unrecognized tax benefits
591 0.3 %510 0.8 %1,049 2.1 %
Other adjustments
Non-controlling interest
(13,014)(6.3)%(11,855)(17.8)%(4,793)(9.5)%
Other1,086 0.5 %529 0.7 %1,075 2.1 %
Effective income tax rate$37,923 18.4 %$(158,647)(238.2)%$724 1.4 %

1State taxes in California and New York City made up the majority (greater than 50%) of the tax effect in this category.
The components of income tax paid are as follows:
For the year ended December 31,
202520242023
Federal
$5,500 $3,500 $406 
State
California
1,001 954 — 
Illinois
— — 87 
New Jersey
— $— $149 
New York City
$— $653 $173 
Tennessee
— — 235 
Texas
— — 147 
Other
3,653 2,282 324 
Foreign
90 102 111 
Income tax paid
$10,244 $7,491 $1,632 

The components of the deferred tax assets and liabilities are as follows:
As of December 31,
Deferred Taxes20252024
Lease liability$363 $513 
R&D credit38 — 
Accrued expenses8 5 
Stock-based compensation327 385 
Investment in partnership340,946 319,434 
Other356 701 
Net operating income2,383 2,320 
Gross deferred tax assets344,421 323,358 
Depreciation and amortization(136)(2,586)
Prepaid expenses and other(60)(65)
ROU asset(323)(461)
Gross deferred tax liabilities(519)(3,112)
Deferred income tax assets before valuation allowance343,902 320,246 
Valuation allowance(38,774)(46,516)
Net deferred tax asset (liability)$305,128 $273,730 
The table below summarizes the significant movement year over year in the Company’s valuation allowance:
As of December 31,
202520242023
Balance as of January 1$46,516 $230,026 $205,900 
(Release of) Additions to valuation allowance through equity
$(10,942)(7,962)27,092 
Release of valuation allowance through income tax expense$— (175,548)(2,966)
Balance as of December 31$38,774 $46,516 $230,026 
As of December 31, 2025, the Company had federal income tax net operating loss (“NOL”) carryforwards of $6,551. The Company had foreign income tax NOL carryforwards of $347, which, if unused, expire in years 2025 through 2035. The Company had state income tax NOL carryforwards of $11,997, $7,330 of which, if unused, will expire in 2041.
Future changes in the ownership of the Company may limit the future utilization of the NOL and tax credit carryforwards, as defined by the federal, foreign, state, and local tax codes (the “Code”). Accordingly, utilization of the NOL carryforwards and credits will be subject to the annual limitation provided by the Code and similar state provisions and may result in the expiration of the NOLs and credits before utilization.
The Company accrues liabilities for uncertain tax positions that are not more likely than not to be sustained upon examination. Interest and penalties related to uncertain tax positions are recorded in accrued liabilities in the accompanying consolidated balance sheets. The following is a tabular reconciliation of the total amounts of unrecognized tax benefit:
For the year ended December 31,
202520242023
Balance as of January 1$1,552 $1,136 $437 
Gross increases - tax positions in prior period355 21 467 
Gross decreases - tax positions in prior period(44)— — 
Gross increases - tax positions in current period276 395 232 
Balance as of December 31$2,139 $1,552 $1,136 
The Company is subject to income taxes in the U.S. and its territories, Israel, Argentina, and Mexico. The statute of limitations for adjustments to our historic tax obligations will vary from jurisdiction to jurisdiction. The tax years for U.S. federal and state income tax purposes open for examination are for the years ending December 31, 2020 and forward. The tax years for foreign jurisdictions open for examination are for the years ending December 31, 2019 and forward.
The Company is asserting permanent reinvestment of all accumulated undistributed earnings of its foreign subsidiaries as of December 31, 2025. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts.

During the year ended December 31, 2025, the Company repurchased 5,294,598 shares of its Class A Common Stock. However, there was no excise tax as of December 31, 2025 because the stock issuances were in excess of repurchases.
Recent U.S. Tax Legislation

On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (“the Act”) that includes several U.S. corporate tax provisions, including 100% bonus depreciation on qualified property and the current deductibility of domestic research and experimental expenditures. The provisions of the Act did not have a material impact on the Company’s tax expense or effective tax rate. The Act lowered the Company’s cash taxes paid for the year ended December 31, 2025, permitting the Company to accelerate the aforementioned deductions.
Tax Receivable Agreement
The Company entered into the TRA, which generally provides for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Clear Secure, Inc. actually realizes or is deemed to realize as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by Alclear Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of the Company’s Class A Common Stock or Class B Common Stock, as applicable, and purchases of Alclear Units and corresponding shares of Class C Common Stock or Class D Common Stock, as the case may be, from the Alclear Members (or their transferees or other assignees) or (b) payments under the TRA, and (ii) tax benefits related to imputed interest arising as a result of payments made under the TRA. The Company will retain the benefit of the remaining 15% of these net cash savings.
The TRA liability is calculated by determining the tax basis subject to TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. Subsequent changes to the measurement of the TRA liability are recognized in the statements of operations as a component of other income (expense), net.
The Company expects to obtain an increase in the share of the tax basis of its share of the assets of Alclear when Alclear Units are redeemed or exchanged by Alclear Members and other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Company would otherwise pay in the future to various tax authorities. The increase in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

During the year ended December 31, 2025, the Company issued 5,308,173 shares of Class A Common Stock to certain non-controlling interest holders who exchanged their Alclear Units. These exchanges resulted in a tax basis increase subject to the provisions of the TRA. The recognition of the Company’s liability under the tax receivable agreement mirrors the recognition related to its deferred tax assets. As of December 31, 2025, the Company has recognized the deferred tax asset of $287,911 for the step-up in tax basis, as the asset is more-likely-than-not to be realized. As a result, the Company has determined the TRA liability is probable and therefore has recorded a tax receivable agreement liability as of December 31, 2025 of $244,724 of which 14,933 is classified as current liabilities. The TRA liability recorded as of December 31, 2024 was $196,801.

Tax Distributions

The members of Alclear, including Clear Secure, Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Alclear. The Operating Agreement provides for pro rata cash distributions (“tax
distributions”) to the holders of the Alclear Units in an amount generally calculated to provide each member of Alclear with sufficient cash to cover its tax liability in respect of the taxable income of Alclear allocable to them. In general, these tax distributions are computed based on Alclear’s estimated taxable income, multiplied by an assumed tax rate as set forth in the Operating Agreement.
For the years ended December 31, 2025, Alclear paid tax distributions of $26,113 to holders of Alclear Units other than Clear Secure, Inc. and the state tax authorities. For the year ended December 31, 2025, Alclear recorded a liability of $7,851 related to tax distributions to holders of Alclear Units other than

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 28, 2024
2022Mar 2, 2023
2021Mar 30, 2022

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.

Other Available Disclosures

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