Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Calumet, Inc. is a corporation and is subject to U.S. federal and state income taxes. Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards, using enacted tax rates in effect for the taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it is more likely than not such net deferred tax assets will not be realized. The Company assessed the realizability of the deferred tax assets (“DTAs”) and concluded that a full valuation allowance for the net DTAs is deemed appropriate as the DTAs, except for as described below, as the DTAs were not more likely than not to be realized under relevant accounting standards. Prior to the quarter ended September 30, 2025, the Company maintained a full valuation allowance on its CFPCs. As a result of the successful monetization of its CPFCs during 2025 through third-party sales under Section 6418 of the Internal Revenue Code, the Company obtained sufficient positive evidence to support the realization of certain deferred tax assets that were previously subject to a valuation allowance. Accordingly, the Company released a portion of the valuation allowance related to those deferred tax assets. Income Tax Expense Historically, we have calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full year to income (loss) for the interim period. In the first and second quarter of 2026, we concluded that we could not calculate a reliable estimate of our annual effective tax rate due to inability to forecast the impacts of various mark-to-market items and their impact on our business and results of operations. Accordingly, we computed the effective tax rate for the three and six-month period ending June 30, 2026 using actual results. Income tax benefit for the three and six months ended June 30, 2026 was $(21.2) million and $(42.1) million, respectively. Income tax expense for the three and six months ended June 30, 2025 was $0.2 million and $0.6 million, respectively. The effective tax rate for the three and six months ended June 30, 2026, was 18.1% and 9.3%, respectively. The effective tax rate for the three and six months ended June 30, 2025, was (0.1)% and (0.2)%, respectively. One Big Beautiful Bill Act On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (the “OBBB”). The OBBB contains several changes to corporate taxation. The Company has assessed the impact of the OBBB, the provisions that impact us the most are the following: •extension of the clean fuel production credit through December 31, 2029; •requirement that feedstocks for fuel produced after December 31, 2025 must be produced or grown exclusively in the U.S., Mexico, or Canada in order for such fuel to be eligible for the clean fuel production credit; •elimination of the special clean fuel production credit rate for SAF produced after December 31, 2025; •clean fuel production credits remain available for transfer and direct pay; and •changes to limitations on deductions for interest expense. We have evaluated the effects of the legislation on our financial position, results of operations or liquidity in the future; the effects of OBBB will not have a material impact on our financial position, results of operations and liquidity in 2026.
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