Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

15. Income Taxes

The components of net income (loss) before income tax expense (benefit) were as follows (in millions):

	December 31,
	2024		2023		2022
Domestic	$	(225.1)	$	45.4	$	(177.6)
Foreign		3.9		4.3		7.7
Total	$	(221.2)	$	49.7	$	(169.9)

The components of the income tax expense (benefit) were as follows (in millions):

	December 31,
Current expense (benefit)	2024		2023		2022
Federal	$	0.7	$	—	$	—
State		(0.7)		0.2		0.4
Foreign		1.2		1.5		2.5
Total	$	1.2	$	1.7	$	2.9
Deferred expense (benefit)
Federal	$	—	$	—	$	—
State		(0.4)		(0.1)		0.5
Foreign		—		—		—
Total	$	(0.4)	$	(0.1)	$	0.5
Total income tax expense (benefit)	$	0.8	$	1.6	$	3.4

The reconciliation between the effective tax rate to the U.S. statutory tax rate is as follows:

	December 31,
	2024			2023			2022
Federal income tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal income tax effect		3.6			0.2			(0.5)
Partnership earnings not subject to tax		(8.3)			(20.0)			(21.4)
Foreign taxes effect		0.5			2.8			(1.4)
Other nontaxable income		4.9			—			—
Other		0.5			—			—
Change in valuation allowance		(22.6)			(0.8)			0.4
Effective tax rate		(0.4)	%		3.2	%		(1.9)	%

On July 10, 2024, Calumet, Inc. completed the Conversion pursuant to which it became the parent holding company of Calumet Specialty Products Partners, L.P. and its subsidiaries. Following the Conversion, the Company’s sole material asset is its interest in the Partnership, which for U.S. federal, state and local income tax purposes its net taxable income and related tax credits, if any, are passed through to its partners and included in the partner’s tax returns. The Partnership is also subject to and reports entity level taxes in certain states. The income tax burden on the earnings taxed to the unitholders other than Calumet, Inc. is not reported by the Company in its consolidated financial statements under U.S. GAAP. As a result, the Company’s effective tax rate differs materially from the statutory rate.

Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions):

	December 31,
	2024		2023
Deferred tax assets:
Investment in partnership	$	190.4	$	—
Net operating loss carryforwards		39.0		0.8
Interest expense limitation carryforwards		20.0		—
Other		3.2		0.8
Total deferred tax assets	$	252.6	$	1.6
Less: valuation allowance		(252.6)		(1.6)
Total deferred tax assets, net of valuation allowance	$	—	$	—
Deferred tax liabilities
Other	$	—	$	(0.4)
Total deferred tax liabilities	$	—	$	(0.4)
Net deferred tax asset (liability)	$	—	$	(0.4)

Due to the weight of objectively verifiable negative evidence, including its history of losses, the Company’s deferred tax assets have been fully offset by a valuation allowance.

As of December 31, 2024, the Company has federal and state net operating loss carryforwards of approximately $146.6 million and $122.6 million, respectively. Federal net operating losses carry forward indefinitely. Of the $122.6 million of state net operating loss carryforwards, $55.3 million carry forward indefinitely. The remaining state net operating loss carryforwards begin to expire in 2034.

As a result of the Company’s analysis, management has determined that the Company does not have any uncertain tax positions. The Company believes the income tax filing positions, including previous status as a pass-through entity, would be sustained on audit and do not anticipate any adjustments that would result in a material change to the consolidated balance sheet. As of December 31, 2024 and 2023, no material unrecognized tax benefits were recognized as liabilities in the consolidated balance sheet.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The only material jurisdiction in which the Company operates is the United States. The Company’s federal and state tax returns remain subject to examination by taxing authorities for three years.