Income Taxes |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company had an income tax expense of $52 on Income before income taxes of $281 and an income tax benefit of $10 on Income before income taxes of $24 for the three months ended June 30, 2026 and 2025, respectively. The Company had an income tax expense of $155 on Income before income taxes of $681 and an income tax benefit of $20 on Loss before income taxes of $198 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, the Company’s income tax expense varies from the expense that would be expected based on the U.S. Federal statutory tax rate due principally to state and local income taxes, nondeductible expenses, and impacts due to valuation allowance. For the six months ended June 30, 2025, the Company’s income tax expense varies from the expense that would be expected based on the U.S. Federal statutory tax rate due principally to its organizational structure, changes in its deferred tax rate, and impacts due to valuation allowance. Rocket Limited Partnership is a partnership for U.S. federal tax purposes and in most applicable jurisdictions for state and local income tax purposes. As a partnership, Rocket Limited Partnership is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Rocket Limited Partnership is passed through and included in the taxable income or loss of its members, including Rocket Companies, in accordance with the terms of the limited partnership agreement of Rocket Limited Partnership. Rocket Companies is a C Corporation and is subject to U.S. federal, state, and local income taxes with respect to its allocable share of any taxable income of Rocket Limited Partnership. Redfin is a direct wholly owned subsidiary of Rocket Companies and as a C Corporation is included in the Rocket Companies consolidated federal tax return after the acquisition. Redfin is subject to state and local income taxes. Prior to the Up-C Collapse, Rocket Companies owned a portion of Holdings LLC Units. Through the Up-C Collapse and conversion of Holdings LLC to Rocket Limited Partnership, Rocket Companies acquired the Holdings Units held by Rocket Companies’ chairman and RHI which have a book basis that is higher than the tax basis in the investment of Holdings LLC. After the Up-C Collapse and the conversion of Holdings LLC to Rocket Limited Partnership, the Company holds, indirectly, 100% of the voting and economic interests of Rocket Limited Partnership. Several subsidiaries of Rocket Limited Partnership, such as Rocket Mortgage, Rocket Close and other subsidiaries, are single member LLC entities. As single member LLCs of Rocket Limited Partnership, all taxable income or loss generated by these subsidiaries passes through and is included in the income or loss of Rocket Limited Partnership. A provision for state and local income taxes is required for certain jurisdictions that tax single member LLCs as regarded entities. Other subsidiaries of Rocket Limited Partnership, such as Rocket Money, RTIC, LMB Mortgage Services and others, are treated as C Corporations and separately file and pay taxes apart from Rocket Limited Partnership in various jurisdictions including but not limited to U.S. federal, state, local and Canada. Tax Receivable Agreement We are a party to a TRA and related TRA Amendment with RHI II, LLC and Mr. Gilbert that provides for the payment by the Company of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes as a result of certain increases in tax basis and other tax benefits. Refer to the 2025 Form 10-K for the year ended December 31, 2025 for the complete description of the Tax Receivable Agreement, including the terms of the amendment executed in connection with the Up-C Collapse. The amounts payable under the Tax Receivable Agreement are recorded in Accounts payable and other liabilities on our Condensed Consolidated Balance Sheets and will vary depending upon a number of factors, including the amount, character and timing of the taxable income of Rocket Companies in the future. Any such changes in these factors or changes in the Company’s determination of the need for a valuation allowance related to the tax benefits acquired under the Tax Receivable Agreement could adjust the Tax Receivable Agreement liability recognized and recorded within earnings in future periods. Tax Distributions Prior to the Up-C Collapse, Holdings LLC made pro rata tax distributions to holders of Holdings LLC Units. Any future tax distributions after the Up-C Collapse would remain within the consolidated financial reporting group. For the three and six months ended June 30, 2025, Holdings LLC paid tax distributions totaling $114 to holders of Holdings LLC Units other than Rocket Companies. Refer to the 2025 Form 10-K for further details.
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