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Federal Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Federal Income Taxes Federal Income Taxes
The federal income tax expense (benefit) on continuing operations (in millions) was as follows:

For the Years Ended December 31,
202520242023
Current$76 $6 $(3)
Deferred85 741 (393)
Federal income tax expense (benefit)$161 $747 $(396)

A reconciliation of the effective tax rate differences (in millions) was as follows:

For the Years Ended December 31,
2025Percent2024Percent2023Percent
Income (loss) before taxes$1,338 $4,022 $(1,148)
Federal income tax expense (benefit) at
federal statutory rate281 21%845 21%(241)21%
Effect of:
Tax credits:
Foreign tax credits(48)(4%)(36)(1%)(36)3%
Other tax credits (5)0%(3)0%(4)0%
Nontaxable or nondeductible items:
Tax-preferred investment income (1)
(82)(6%)(32)0%(126)11%
Share-based compensation expense 10%30%40%
Other nontaxable or nondeductible items14 1%110%7(1%)
Changes in unrecognized tax benefits – 0%(41)(1%)– 0%
Federal income tax expense (benefit)$161 12%$747 19%$(396)34%
    

(1) Relates primarily to separate account dividends eligible for the dividends-received deduction.
 
The federal income tax asset (liability) (in millions) was as follows:

As of December 31,
20252024
Current$115 $107 
Deferred261 604 
Total federal income tax asset (liability)$376 $711 

Significant components of our deferred tax assets and liabilities (in millions) were as follows:

As of December 31,
20252024
Deferred Tax Assets
Insurance liabilities and reinsurance-related balances$2,268 $1,856 
Net unrealized loss on fixed maturity AFS securities1,683 2,164 
Reinsurance-related embedded derivative liabilities61 6 
Compensation and benefit plans219 206 
Intangibles14 17 
Net unrealized loss on trading securities17 30 
Tax credits234 169 
Net operating losses505 478 
Capital losses86 56 
Other64 – 
Total deferred tax assets$5,151 $4,982 
Deferred Tax Liabilities
DAC and VOBA$1,615 $1,638 
Investment activity2,104 1,486 
Deferred loss on reinsurance461 474 
MRB-related activity710 743 
Other– 37 
Total deferred tax liabilities$4,890 $4,378 
Net deferred tax asset (liability)$261 $604 
As of December 31, 2025, we had $234 million of federal income tax credits, primarily related to foreign tax credits, that can be carried forward to 2030 through 2035. As of December 31, 2025, we had $2.4 billion of net operating losses to carry forward to future years. As of December 31, 2025, we had $411 million of capital losses to carry forward to future years. The net operating losses arose in tax years 2018, 2021, 2024 and 2025 and under the Tax Cuts and Jobs Act changes have an unlimited carryforward period. The capital losses arose in tax years 2023 and 2025 and can be carried back three years and forward five years. As a result, management believes that it is more likely than not that the deferred tax asset associated with the loss carryforwards will be realized. Inclusive of the tax attribute for the net operating losses, although realization is not assured, management believes that it is more likely than not that we will realize the benefits of all our deferred tax assets, and, accordingly, no valuation allowance has been recorded.

We are subject to examination by U.S. federal, state, local and non-U.S. income authorities. With few exceptions for limited scope review, we are no longer subject to U.S. federal examinations for years before 2021. In the first quarter of 2021, the Internal Revenue Service commenced an examination of our 2014, 2015, 2016 and 2017 refund claims. We are currently under examination by several state and local taxing jurisdictions; however, we do not expect these examinations will materially impact us.
A reconciliation of the gross unrecognized federal tax benefits (in millions) was as follows:

For the Years Ended December 31,
20252024
Balance as of beginning-of-year$39 $87 
Decreases for prior year tax positions(5)(48)
Increases for prior year tax positions– – 
Balance as of end-of-year$34 $39 

As of December 31, 2025 and 2024, $34 million and $33 million, respectively, of our gross unrecognized federal tax benefits presented above, if recognized, would have affected our federal income tax expense (benefit) and our effective tax rate. We anticipate that it is reasonably possible that unrecognized tax benefits will decrease by $2 million by the end of 2026.

We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the years ended December 31, 2025, 2024 and 2023, we recognized no interest and penalty expense (benefit), and there was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2025 and 2024.

In August 2022, the Inflation Reduction Act of 2022 was passed by the U.S. Congress and signed into law by President Biden. The Inflation Reduction Act of 2022 established a new 15% corporate alternative minimum tax for corporations whose average adjusted net income for any consecutive three-year period beginning after December 31, 2022, exceeds $1.0 billion. The Inflation Reduction Act of 2022 also established a 1% excise tax on stock repurchases made by publicly traded corporations. Both provisions became effective for tax years beginning after December 31, 2022. We determined that we were not within the scope of the corporate alternative minimum tax for 2025.