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

Income Taxes

v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The jurisdictional components of income before income taxes and non-controlling interests on our Consolidated Statements of Operations are as follows (in millions):
Year Ended December 31,
2025 2024 2023
U.S. federal $ 7,239  $ 4,696  $ 11,176 
International 1,043  607  3,402 
Total income before income taxes and non-controlling interests $ 8,282  $ 5,303  $ 14,578 
Income tax provision included in our reported net income consisted of the following (in millions): 
Year Ended December 31,
2025 2024 2023
Current:
U.S. federal $ (383) $ 471  $ 130 
State 1  2  1 
Foreign 11  8  (1)
Total current (371) 481  130 
Deferred:
U.S. federal 1,846  319  2,377 
State 12  9  15 
Foreign 1  2  (3)
Total deferred 1,859  330  2,389 
Total income tax provision $ 1,488  $ 811  $ 2,519 
 
The table below provides the updated requirements of ASU No. 2023-09 for 2025. See Note 2—Summary of Significant Accounting Policies for additional details on the adoption of ASU No. 2023-09.

Our income tax rates do not bear a customary relationship to statutory income tax rates. A reconciliation of the U.S. federal statutory income tax rate of 21% to our effective income tax rate for the year ended December 31, 2025 is as follows: 
Year Ended December 31, 2025
Amount
(in millions)		 Percent (2)
U.S. federal statutory tax rate $ 1,739  21.0  %
State and local income taxes, net of federal income tax effect (1) 11  0.1 
Foreign tax effects
United Kingdom
Cheniere Marketing income not taxable in the U.K. under transfer pricing principles (249) (3.0)
Other 40  0.5 
Other foreign jurisdictions 2  — 
Effects of cross-border tax laws (2) — 
Tax credits (4) (0.1)
Changes in valuation allowance 54  0.7 
Nontaxable or nondeductible items
CQP income not taxable to Cheniere (313) (3.8)
Other 9  0.1 
Changes in unrecognized tax benefits 3  — 
Other adjustments
Cheniere Marketing income taxable in the U.S. under transfer pricing principles 209  2.5 
Other (11) — 
Effective tax rate as reported $ 1,488  18.0  %
(1)State taxes in Louisiana and Texas contributed to the majority of the tax effect in this category.
(2)The percentages in the table may not recalculate exactly due to rounding as the percentages are calculated based on whole numbers, not the rounded numbers presented.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, a reconciliation of the U.S. federal statutory income tax rate of 21% to our effective income tax rate was as follows:
Year Ended December 31,
2024 2023
U.S. federal statutory tax rate 21.0  % 21.0  %
Income not taxable to Cheniere (5.0) (3.1)
Foreign-derived intangible income deduction (1.0) (0.7)
Changes in valuation allowance (0.7) — 
Other 1.0  0.1 
Effective tax rate as reported 15.3  % 17.3  %

Significant components of our deferred tax assets and liabilities are as follows (in millions): 
December 31,
2025 2024
Deferred tax assets    
Net operating loss (“NOL”) carryforwards
U.S. federal $ 245  $ 313 
State 119  119 
Tax Credits
CAMT carryforward —  383 
Other tax credits 50  40 
Operating lease liabilities 566  562 
Other 447  306 
Less: valuation allowance (1) (170) (110)
Total deferred tax assets 1,257  1,613 
Deferred tax liabilities  
Investment in partnerships (375) (305)
Property, plant and equipment (3,277) (2,459)
Operating lease assets (553) (548)
Derivative instruments (696) (108)
Other (42) (30)
Total deferred tax liabilities (4,943) (3,450)
Net deferred tax liabilities $ (3,686) $ (1,837)
(1)Valuation allowance primarily relates to a valuation allowance recorded on U.S. federal capital loss carryforwards and state NOL carryforwards and increased by $60 million during the year ended December 31, 2025 primarily due to a capital loss carryforward generated in the current year that we do not expect to realize before expiration. The valuation allowance decreased by $37 million during the year ended December 31, 2024 and increased by $4 million during the year ended December 31, 2023.

NOL and tax credit carryforwards

As of December 31, 2025, we had U.S. federal and state NOL carryforwards of approximately $1.2 billion and $2.2 billion, respectively. All of our NOLs have an indefinite carryforward period.

As of December 31, 2025, our other tax credits expire between 2028 and 2035.

Our NOL and tax credit carryforwards are not subject to, nor impacted by, any prior tax ownership change. We continue to monitor public trading activity in our shares to identify potential tax ownership changes that could impact our timing and ability to utilize such attributes.
Tax Law Changes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law with significant changes to the Internal Revenue Code that impact us, including, among other provisions, reinstating 100% accelerated tax bonus depreciation on qualifying assets acquired after January 19, 2025 and modifying the export-promoting Foreign Derived Intangible Income (“FDII”) deduction rules, renamed to the Foreign Derived Deduction Eligible Income (“FDDEI”) under the OBBBA beginning in 2026.
The legislation did not have a material impact on our income tax expense for the year ended December 31, 2025, and it did not materially change our effective income tax rate for 2025. However, the 100% bonus depreciation provision under the OBBBA deferred our tax liability, ultimately reducing our 2025 income taxes payable to a nominal amount, primarily due to the accelerated tax deduction on qualifying Corpus Christi Stage 3 Project assets.
On September 30, 2025, the Internal Revenue Service issued Notice 2025-49, which includes, among other provisions, revised interim rules for calculating CAMT adjusted financial statement income, including rules allowing us to utilize and benefit from our existing net operating loss carryovers for both CAMT and regular tax in the same period. As a result, our cash tax obligations have been deferred, and we received a refund of $380 million of previously paid CAMT in December 2025.
Unrecognized Tax Benefits

As of December 31, 2025, 2024 and 2023, there were $63 million, $65 million and $66 million, respectively, of unrecognized tax benefits that, if recognized, would affect our effective tax rate in future periods. Interest and penalties related to income tax matters are recognized as part of income tax provision. Interest and penalties recognized as part of income tax provision was $6 million, $6 million and $4 million for the years ended December 31, 2025, 2024 and 2023, respectively, and cumulative accrued interest was $15 million and $10 million as of December 31, 2025 and 2024, respectively.

We are subject to tax in the U.S. and various state and foreign jurisdictions, and we are subject to periodic audits and reviews by taxing authorities. Federal tax returns for the years after 2017, United Kingdom tax returns for the years after 2020, Louisiana tax returns for the years after 2021 and Texas tax returns for the years after 2020 remain open for examination. Tax authorities may have the ability to review and adjust carryover attributes that were generated prior to these periods if utilized in an open tax year.

A reconciliation of the beginning and ending amounts of our unrecognized tax benefits is as follows (in millions): 
Year Ended December 31,
2025 2024 2023
Balance at beginning of the year $ 72  $ 73  $ 74 
Statute of limitations expiration (3) —  — 
Reductions for tax positions of prior years —  (1) (1)
Balance at end of the year $ 69  $ 72  $ 73 
The following is a supplemental schedule of cash paid for income taxes, net of refunds, for the year ended December 31, 2025 (in millions):
Year Ended December 31,
2025
U.S. federal $ 47 
State and local 2 
Foreign
United Kingdom (18)
Other 1 
Total Foreign (17)
Total income taxes paid, net of refunds received $ 32 
We received an aggregate of $92 million in income tax refunds, net of payments, during the year December 31, 2024 and we made an aggregate of $117 million in income tax payments, net of refunds, during the year ended December 31, 2023.