v3.25.4
Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
7.Income Taxes
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the net deferred tax assets as reflected on the Consolidated Balance Sheets are as follows:
December 31,
(in millions)
20252024
 
Deferred tax liabilities
Prepaid assets$(4)$(4)
Depreciation(3)(5)
Software development costs(2)— 
Tenant improvements(3)(3)
Right-of-use leased assets(19)(19)
Intangibles(3)(3)
Total deferred tax liabilities(34)(34)
Deferred tax assets
Accrued incentive compensation11 12 
Workers’ compensation accruals4 4 
Accrued rent3 2 
Software development costs
— 13 
Stock-based compensation15 15 
Operating lease liabilities22 22 
Other2 1 
Total deferred tax assets57 69 
Valuation allowance(1)(1)
Total net deferred tax assets56 68 
Net deferred tax assets$22 $34 
The components of income tax expense are as follows:
Year Ended December 31,
(in millions)
202520242023
 
Current income tax expense (benefit)
Federal$(7)$41 $49 
State(2)8 9 
Total current income tax expense (benefit)
(9)49 58 
Deferred income tax expense (benefit)
Federal10 (11)(3)
State2 (3)(1)
Total deferred income tax expense (benefit)
12 (14)(4)
Total income tax expense$3 $35 $54 
The reconciliation of income tax expense computed at U.S. federal statutory tax rates to the reported income tax expense from continuing operations is as follows:
Year Ended December 31,
202520242023
(in millions)
Amount
Percent
AmountPercentAmount
Percent
Expected income tax expense (benefit) at U.S. federal statutory rate
$(1)21 %$26 21 %$47 21 %
State income taxes, net of federal benefit(1)
1 (14)%4 3 %7 3 %
Tax credits
Research and development credit
(3)70 %(1)(1)%(1)(1)%
Nontaxable or nondeductible Items
Equity compensation
1 (33)%1 1 %(4)(2)%
Executive compensation limited under 162(m)
2 (42)%3 2 %2 1 %
Qualified transportation benefits
2 (40)%1 1 %1 1 %
Meals and entertainment
1 (37)%1 1 %2 1 %
Effective tax rate
$3 (75)%$35 28 %$54 24 %
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(1) State and local income taxes in the following states make up the majority (greater than 50%) of the tax effected category:
     In 2025, California. In 2024, California, New York, New York City, and Illinois. In 2023, California, New York, and New York City.
At December 31, 2025, we had net operating loss carryforwards totaling $1 million that expire from 2029 to 2030 related to an acquisition that occurred in 2010.
We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025, 2024 and 2023, we had no uncertain tax positions, and as a result, have made no provisions for interest or penalties related to uncertain tax positions. The tax years 2022 through 2024 remain open to examination by the Internal Revenue Service of the United States. The tax years 2021 through 2024 remain open to examination by various state tax authorities.