Bank of America Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense for 2024, 2023 and 2022 are presented in the table below.



Income Tax Expense

(Dollars in millions)	2024		2023		2022
Current income tax expense
U.S. federal	$	1,188	$	1,361	$	1,157
U.S. state and local	603		559		389
Non-U.S.	2,065		1,918		1,156
Total current expense	3,856		3,838		2,702
Deferred income tax expense
U.S. federal	(2,271)		(2,241)		110
U.S. state and local	138		(53)		254
Non-U.S.	399		283		375
Total deferred expense	(1,734)		(2,011)		739
Total income tax expense	$	2,122	$	1,827	$	3,441

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the expected U.S. federal income tax expense, calculated by applying the federal statutory tax rate, to the Corporation’s actual income tax expense, and the effective tax rates for 2024, 2023 and 2022 are presented in the following table.



Reconciliation of Income Tax Expense

	Amount		Percent		Amount		Percent		Amount		Percent
(Dollars in millions)	2024				2023				2022
Expected U.S. federal income tax expense	$	6,143	21.0	%	$	5,952	21.0	%	$	6,504	21.0	%
Increase (decrease) in taxes resulting from:
State tax expense, net of federal benefit	678		2.3		475		1.7		756		2.4
Affordable housing/energy/other credits	(5,100)		(17.4)		(4,920)		(17.4)		(3,698)		(11.9)
Tax-exempt income, including dividends	(416)		(1.4)		(373)		(1.3)		(273)		(0.9)
Tax law changes	—		—		(137)		(0.5)		186		0.6
Changes in prior-period UTBs, including interest	(99)		(0.3)		(26)		(0.1)		(273)		(0.9)
Rate differential on non-U.S. earnings	635		2.2		601		2.1		368		1.2
Nondeductible expenses	365		1.2		367		1.3		352		1.1
Other	(84)		(0.3)		(112)		(0.4)		(481)		(1.5)

Total income tax expense	$	2,122	7.3	%	$	1,827	6.4	%	$	3,441	11.1	%

Reconciliation of Change in Unrecognized Tax Benefits

The reconciliation of the beginning unrecognized tax benefits (UTB) balance to the ending balance is presented in the table below.



Reconciliation of the Change in Unrecognized Tax Benefits

(Dollars in millions)	2024		2023		2022
Balance, January 1	$	811	$	1,056	$	1,322
Increases related to positions taken during the current year	55		76		121
Increases related to positions taken during prior years (1)	39		139		167
Decreases related to positions taken during prior years (1)	(134)		(32)		(289)
Settlements	(62)		(380)		(99)
Expiration of statute of limitations	(25)		(48)		(166)
Balance, December 31	$	684	$	811	$	1,056

(1) The sum of the positions taken during prior years differs from the $(99) million, $(26) million and $(273) million in the Reconciliation of Income Tax Expense table due to temporary items, state items and jurisdictional offsets, as well as the inclusion of interest in the Reconciliation of Income Tax Expense table.

Summary of Income Tax Examinations

The table below summarizes the status of examinations by major jurisdiction for the Corporation and various subsidiaries at December 31, 2024.



Tax Examination Status

	Years under Examination (1)	Status at December 31, 2024
United States	2017-2021	Field Examination
California	2015-2017	Field Examination
California	2018-2021	Field Examination
New York	2019-2021	Field Examination
United Kingdom (2)	2021-2022	Field Examination

(1) All tax years subsequent to the years shown remain subject to examination.

(2) Field examination for tax year 2023 to begin in 2025.

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Corporation’s net deferred tax assets and liabilities at December 31, 2024 and 2023 are presented in the following table.



Deferred Tax Assets and Liabilities

	December 31
(Dollars in millions)	2024		2023
Deferred tax assets
Tax attribute carryforwards	$	11,863	$	11,084
Allowance for credit losses	3,463		3,518
Security, loan and debt valuations	2,680		3,991
Lease liability	2,169		2,328
Employee compensation and retirement benefits	1,760		1,698
Accrued expenses	1,379		1,640
Other	1,983		1,475
Gross deferred tax assets	25,297		25,734
Valuation allowance	(2,361)		(2,108)
Total deferred tax assets, net of valuation allowance	22,936		23,626

Deferred tax liabilities
Equipment lease financing	3,021		2,488
Right-of-use asset	2,025		2,180
Tax credit investments	1,921		1,884
Fixed assets	151		789
Other	1,769		1,913
Gross deferred tax liabilities	8,887		9,254
Net deferred tax assets	$	14,049	$	14,372

Schedule of Operating Loss Carryforwards

The table below summarizes the deferred tax assets and related valuation allowances recognized for the net operating loss (NOL) and tax credit carryforwards at December 31, 2024.



Net Operating Loss and Tax Credit Carryforward Deferred Tax Assets

(Dollars in millions)	Deferred Tax Asset		Valuation Allowance		Net Deferred Tax Asset		First Year Expiring

Net operating losses - U.K. (1)	$	7,519	$	—	$	7,519	None
Net operating losses - other non-U.S.	135		(41)		94		Various
Net operating losses - U.S. states (2)	525		(363)		162		Various
General business credits	2,861		—		2,861		Various
Foreign tax credits	823		(823)		—		After 2028

(1)Represents U.K. broker-dealer net operating losses that may be carried forward indefinitely.

(2)The net operating losses and related valuation allowances for U.S. states before considering the benefit of federal deductions were $664 million and $459 million.

Summary of Tax Credit Carryforwards

The table below summarizes the deferred tax assets and related valuation allowances recognized for the net operating loss (NOL) and tax credit carryforwards at December 31, 2024.



Net Operating Loss and Tax Credit Carryforward Deferred Tax Assets

(Dollars in millions)	Deferred Tax Asset		Valuation Allowance		Net Deferred Tax Asset		First Year Expiring

Net operating losses - U.K. (1)	$	7,519	$	—	$	7,519	None
Net operating losses - other non-U.S.	135		(41)		94		Various
Net operating losses - U.S. states (2)	525		(363)		162		Various
General business credits	2,861		—		2,861		Various
Foreign tax credits	823		(823)		—		After 2028

(1)Represents U.K. broker-dealer net operating losses that may be carried forward indefinitely.

(2)The net operating losses and related valuation allowances for U.S. states before considering the benefit of federal deductions were $664 million and $459 million.