NRG · 10-Q · 2026Q2 · Full report
Income Tax Rate Changes
NRG ENERGY, INC. · 2026-08-04 · Importance 40 · Surprise 56 · In source text
NRG’s effective income tax rate for the six months ended June 30, 2026 was 15.4%, down from 22.4% in the six months ended June 30, 2025. The 700-basis-point reduction was primarily driven by favorable permanent differences related to stock-based compensation and the remeasurement of state net operating losses following the LSP Portfolio acquisition. For the three months ended June 30, 2026, the effective tax rate was 23.7%, above the 21% statutory rate because of state tax expense, partly offset by favorable permanent differences. The enacted OBBB tax law had no material impact on income tax expense or benefit for the periods presented, and CAMT had no impact on the provision for the three or six months ended June 30, 2026 or 2025.
Key facts
- As of June 30, 2026, cumulative U.S. federal NOL carryforwards were $6.6 billion, of which $5.1 billion do not have an expiration date; cumulative state NOL carryforwards were $6.1 billion; cumulative foreign NOL carryforwards $392 million source
- As of June 30, 2026, the Company had tax-effected cumulative U.S. NOLs of $1.4 billion federal and $326 million state and tax-effected cumulative foreign NOL carryforwards of $104 million source
- As of June 30, 2026 and December 31, 2025, NRG recorded a net deferred tax asset, excluding valuation allowance, of $1.9 billion and $2.0 billion, respectively source
- On July 4, 2025, H.R.1 - One Big Beautiful Bill Act (OBBB) was enacted into law and includes changes to U.S. tax law applicable to NRG beginning in 2025; the impact has been reflected in current and deferred taxes with no material impact to income tax expense/(benefit) for the periods presented. source
- For the three months ended June 30, 2026, the effective income tax rate was 23.7% and for the three months ended June 30, 2025 it was 32.0%; for the six months ended June 30, 2026 it was 15.4% and for the six months ended June 30, 2025 it was 22.4%. source
- For the three months ended June 30, 2026, income tax expense of $157 million was recorded on pre-tax income of $663 million; effective tax rate 23.7% source
- For the six months ended June 30, 2026, income tax expense was $115 million on pre-tax income of $746 million; effective tax rate 15.4% source
- Valuation allowance was $146 million as of June 30, 2026 and $150 million as of December 31, 2025 source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| assets | positive | realized | +4.6% | As of June 30, 2026, the Company had tax-effected cumulative U.S. NOLs of $1.4 billion federal and $326 million state and tax-effected… |
| assets | negative | realized | -0.3% | As of June 30, 2026 and December 31, 2025, NRG recorded a net deferred tax asset, excluding valuation allowance, of $1.9 billion and $2.0… |
| assets | positive | contingent | — | As of June 30, 2026, cumulative U.S. federal NOL carryforwards were $6.6 billion, of which $5.1 billion do not have an expiration date;… |