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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of deferred income taxes at December 31, 2025 and 2024 are as follows:
20252024
Deferred income tax assets:
Accrued expenses$652 $826 
Bad debt reserves465 434 
Insurance reserves122 192 
Lease liabilities137 170 
Retirement liabilities107 126 
Deferred compensation42 45 
Federal and state carryforwards
617 428 
Foreign (including Puerto Rico) carryforwards236 139 
Other53 51 
Subtotal2,431 2,411 
Less: valuation allowance(311)(294)
Total deferred income tax assets2,120 2,117 
Deferred income tax liabilities:
U.S. federal and state intangible assets2,447 2,584 
Foreign (including Puerto Rico) intangible assets125 194 
Capitalized software439 513 
Depreciation and amortization20 38 
Investment basis276 11 
Retirement assets295 330 
Lease right-of-use assets
89 114 
Prepaid expenses240 275 
Total deferred income tax liabilities3,931 4,059 
Net deferred income tax liabilities$1,811 $1,942 
Deferred tax balances are classified by deferred tax assets and deferred tax liabilities by taxing jurisdiction in the financial statements. We recognized $298 and $206 of deferred tax asset under the caption “Other noncurrent assets” at December 31, 2025 and 2024, respectively. We recognized $2,110 and $2,148 of deferred tax liability under the caption “Deferred tax liabilities, net” at December 31, 2025 and 2024, respectively.
As of December 31, 2025, we have established U.S. deferred taxes for undistributed earnings from certain non-U.S. subsidiaries, which are included in the Investment basis component above, consistent with prior years.
Significant components of income before income tax expense for the years ended December 31, 2025, 2024 and 2023 consist of the following:
202520242023
Domestic U.S.6,322 7,629 7,580 
Foreign (including Puerto Rico)388 275 135 
Income before income tax expense
$6,710 $7,904 $7,715 
Income before income taxes, as shown above, is based on the location of the entity to which such earnings are attributable. Where an entity’s earnings are subject to taxation, however, may not correlate solely to where an entity is located. Thus, the income tax provision shown below as federal or foreign may not correspond to the earnings shown above.
Significant components of the provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consist of the following:
202520242023
Current tax expense:
Federal$1,000 $1,753 $1,899 
Foreign (including Puerto Rico)199 93 95 
State and local128 448 420 
Total current tax expense1,327 2,294 2,414 
Deferred tax expense (benefit):
Federal(42)(232)(413)
Foreign (including Puerto Rico)(180)(134)(167)
State and local(56)5 (110)
Total deferred tax expense (benefit)
(278)(361)(690)
Total income tax expense$1,049 $1,933 $1,724 
State and local current tax expense is reported gross of federal benefit in the preceding table, and includes amounts related to audit settlements, uncertain tax positions, state tax credits and true up of prior years’ tax. Such items are included on a net of federal tax basis in the state and local income taxes line in the following 2025 rate reconciliation table and in multiple lines in the 2024 and 2023 rate reconciliation table.
A reconciliation of income tax expense recorded in the consolidated statements of income and amounts computed at the statutory federal income tax rate for the year ended December 31, 2025 is as follows:
2025
AmountPercent
Amount at statutory rate$1,409  21.0 %
State and local income taxes, net of federal tax expense/benefit(1)
121  1.8 %
Tax credits:
 
Energy-related tax credits
(86)(1.3)%
Other
(62)(0.9)%
Nontaxable or nondeductible items:
 
Legal entity restructuring
(176)(2.6)%
Other
(75)(1.1)%
Changes in unrecognized tax benefits(71) (1.1)%
Other, net(11) (0.2)%
Total income tax expense$1,049 15.6 %
'(1) State taxes in California, Indiana, Florida, and New York City contributed to the majority of the tax effect in this category.
During the year ended December 31, 2025, we recognized income tax expense of $1,049, or $4.67 per diluted share. The decrease in effective income tax rate for 2025 compared to 2024 was primarily due to a discrete non-operating tax benefit and favorable resolution of uncertain tax positions. The discrete non-operating tax benefit related to an internal restructuring of certain Elevance Health subsidiaries.
A reconciliation of income tax expense recorded in the consolidated statements of income and amounts computed at the statutory federal income tax rate for the years ended December 31, 2024 and 2023 is as follows:
 20242023
 AmountPercentAmountPercent
Amount at statutory rate$1,660 21.0 %$1,620 21.0 %
State and local income taxes, net of federal tax expense/benefit
216 2.7 124 1.6 
Tax exempt interest and dividends received deduction
(12)(0.1)(15)(0.2)
Change in valuation allowance
43 0.6 84 1.1 
Other, net26 0.3 (89)(1.2)
Total income tax expense$1,933 24.5 %$1,724 22.3 %
During the year ended December 31, 2024, we recognized income tax expense of $1,933, or $8.30 per diluted share. The increase in effective income tax rate for 2024 compared to 2023 was primarily from state and local income taxes due to the impact of geographic changes in the mix of 2024 earnings.
During the year ended December 31, 2023, we recognized income tax expense of $1,724, or $7.26 per diluted share. The decrease in effective income tax rate for 2023 compared to 2022 was primarily from state and local income taxes due to the impact of geographic changes in the mix of 2023 earnings.
The change in the carrying amount of gross unrecognized tax benefits from uncertain tax positions for the years ended December 31, 2025 and 2024 is as follows:
20252024
Balance at January 1$775 $468 
Additions based on:
Tax positions related to current year83 146 
Tax positions related to prior years6 216 
Reductions based on:
Tax positions related to prior years(255)(50)
Settlements with taxing authorities(62)(5)
Balance at December 31$547 $775 
The table above excludes interest and penalties, net of related tax benefits, which are treated as income tax expense (benefit) under our accounting policy. The interest and penalties are included in the amounts described in the following paragraph.
The amount of unrecognized tax benefits that would impact our effective tax rate in future periods, if recognized, was $630 and $804 at December 31, 2025 and 2024, respectively. Also included in the table above, at December 31, 2025, is $2 that would be recognized as an adjustment to additional paid-in capital, which would not affect our effective tax rate.
For the years ended December 31, 2025, 2024 and 2023, we recognized net interest (benefit) expense of ($15), $57 and $24, respectively. We had accrued approximately $147 and $165 for the payment of interest at December 31, 2025 and 2024, respectively. For the years ended December 31, 2025, 2024 and 2023 we recognized net penalty expense (benefit) of ($41), $7 and $17, respectively. We had accrued approximately $41 and $85 for the payment of penalties at December 31, 2025 and 2024, respectively.
We are a member of the IRS Compliance Assurance Process (“CAP”). The objective of CAP is to reduce taxpayer burden and uncertainty while assuring the IRS of the accuracy of tax returns prior to filing, thereby reducing or eliminating the need for post-filing examinations. As of December 31, 2025, the IRS examination of our 2025, 2024, 2023 and 2022 tax years continues to be in process.
In certain states, we pay premium taxes in lieu of state income taxes. Premium taxes are reported in operating expense.
At December 31, 2025, we had federal net operating loss carryforwards of $266, of which $202 will expire beginning 2028 through 2045 and $64 have an indefinite carryforward period. State and local net operating loss carryforwards of $456, of which $447 will expire beginning 2026 through 2044, and $9 have an indefinite carryforward period. Foreign net operating loss carryforward of $188 will expire beginning 2033 through 2035.
Income taxes netted to a receivable of $436 and $138 at December 31, 2025 and 2024, respectively. We recognized the income tax receivable of $587 and $213 by taxing jurisdiction as an asset under the caption “Other current assets” and the income tax payable of $151 and $75 by taxing jurisdiction as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of December 31, 2025 and 2024, respectively.
During 2025, 2024 and 2023, federal income taxes due totaled $1,367, $1,411 and $1,936, respectively. During 2025 and 2024. we utilized transferable federal tax credits of $1,304 and $108, respectively, to satisfy our federal income taxes due. During 2025, state income taxes paid totaled $315.