Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Vistra files a U.S. federal income tax return that includes the results of its consolidated subsidiaries. Vistra serves as the corporate parent of the Vistra consolidated group. Pursuant to applicable U.S. Department of the Treasury regulations and published guidance of the IRS, corporations that are members of a consolidated group have joint and several liability for the taxes of such group.

Income Tax Expense

The components of our income tax expense are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	(in millions)
Net income before income taxes	$	856		$	2,392		$	815		$	3,016
Income tax expense	$	(204)		$	(555)		$	(104)		$	(694)
Effective tax rate	23.8		%	23.2		%	12.8		%	23.0		%

We evaluate and update our annual effective income tax rate on an interim basis based on current and forecasted earnings and tax laws. The mix and timing of our actual earnings compared to annual projections, as well as the amount of pre-tax earnings in comparison to the required discrete items, can cause interim effective tax rate fluctuations.

For the three months ended September 30, 2025, the effective rate of 23.8% was higher than the U.S. federal statutory rate of 21% due primarily to state income taxes. For the nine months ended September 30, 2025, the effective tax rate of 12.8% was lower than the U.S. federal statutory rate of 21% due primarily to permanent differences recorded discretely related to stock-based compensation, partially offset by state income taxes.

For the three months ended September 30, 2024, the effective tax rate of 23.2% was higher than the U.S. federal statutory rate of 21% due primarily to state income taxes. For the nine months ended September 30, 2024, the effective tax rate of 23.0% was higher than the U.S. federal statutory rate of 21% due primarily to the impact of state income taxes offset by discrete tax benefits related to stock-based compensation.

OBBBA and CAMT

In July 2025, the legislation known as the OBBBA was signed into law and we have accounted for the effects in our consolidated financial statements. Key changes include the immediate expensing of domestic research and development costs, the reinstatement of 100% bonus depreciation, and increases in the limitation of interest deductibility. Certain provisions of the OBBBA will change the timing of cash tax payments in the current fiscal year and future year periods, however the legislation did not have a material impact on our consolidated financial statements. We do not expect Vistra to be subject to the corporate alternative minimum tax (CAMT) in the 2025 tax year as it applies only to corporations with a three-year average annual adjusted financial statement income in excess of $1 billion. We have taken the CAMT and forecasted OBBBA impacts into account when forecasting cash taxes.