Company: ALIT
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001809104-25-000062
Chunk: 208

Company: Alight, Inc. / Delaware
Filing Date: 2025-02-27
Form: 10-K
Item: Item 3
Chunk 208
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 on statutory rates due principally to its organizational structure. The Company is taxed as a corporation and is subject to corporate federal, state, and local taxes on the income allocated to it from Alight Holdings, based upon the Company’s economic interest in Alight Holdings, and any stand-alone income or loss generated by the Company. Alight Holdings and certain subsidiaries combine to form a single entity taxable as a partnership for U.S. federal and most applicable state and local income tax purposes. As such, Alight Holdings is not subject to U.S. federal and certain state and local income taxes. The partners of Alight Holdings, including the Company, are liable for federal, state, and local income taxes based on their allocable share of Alight Holdings’ pass-through taxable income, which includes income of Alight Holdings’ subsidiaries that are treated as disregarded entities separate from Alight Holdings for income tax purposes. The effective tax rate for the year ended December 31, 2024 is lower than the 21% U.S. statutory corporate income tax rate primarily due to changes in valuation allowances, tax credits, and non-deductible expenses.

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Deferred Income TaxesThe components of the Company’s deferred tax assets and liabilities are as follows (in millions):December 31, 2024December 31, 2023Deferred tax assets:Interest expense carryforward$124 $64 Other credits65 57 Tax receivable agreement132 114 Seller Earnouts5 12 Intangible assets3 4 Net operating losses30 75 Other3 — Total$362 $326 Valuation allowance on deferred tax assets(86)(60)Total$276 $266 Deferred tax liabilities:Intangible assets$(29)$(33)Investment in partnership(207)(194)Interest rate swap(5)(15)Other(16)(18)Total$(257)$(260)Net deferred tax (liability) asset$19 $6 As a result of the Business Combination, the Company established a deferred tax asset for the value of certain tax loss and credit carryforward attributes of the merged entities. In addition, the Company established a deferred tax liability to account for the difference between the Company’s book and tax basis in its investment in Alight Holdings. The Company also has historically maintained deferred tax assets on certain net operating loss (“NOL”) carryforwards in non-U.S. jurisdictions.As of December 31, 2024 and 2023, the Company had U.S.