Income tax expense for the three years ended December 31, 2024, 2023, and 2022 differs from the U.S. federal statutory rate primarily due to the tax treatment of income attributable to noncontrolling interests in IBG LLC. These noncontrolling interests are held directly through a U.S. partnership. Accordingly, the income attributable to these noncontrolling interests is reported in the consolidated statements of comprehensive income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is generally the obligation of the noncontrolling interests. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation.

Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the common stock offerings (see Note 4), differences in the valuation of financial assets and liabilities, and for other temporary differences arising from the deductibility of compensation and depreciation expenses in different periods for accounting and income tax return purposes.

Under U.S. GAAP, the Company is allowed to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to global intangible low tax income as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected the period cost method.

The table below presents the components of the provision for income taxes for the periods indicated.


	Year-Ended December 31,
	2024		2023		2022

	(in millions)
Current
Federal	$	133	$	104	$	59
State and local		22		14		8
Foreign		135		109		69
Total current		290		227		136
Deferred
Federal		8		27		21
State and local		(9)		4		4
Foreign		(1)		(1)		(5)
Total deferred		(2)		30		20
	$	288	$	257	$	156

The table below presents a reconciliation of the statutory U.S. Federal income tax rate of 21% to the Company’s effective tax rate for the periods indicated.


	Year-Ended December 31,
	2024		2023		2022
U.S. Statutory Tax Rate		21.0%		21.0%		21.0%
State, local and foreign taxes, net of federal benefit		1.8%		2.5%		2.1%
Subtotal		22.8%		23.5%		23.1%
Less: rate attributable to noncontrolling interests		(15.0%)		(15.1%)		(15.3%)
Total		7.8%		8.4%		7.8%

The table below presents significant components of the Company’s deferred tax assets and liabilities, which are reported in other assets and in accounts payable, accrued expenses and other liabilities, respectively, in the consolidated statements of financial condition for the periods indicated.


	December 31,
	2024		2023		2022

	(in millions)
Deferred tax assets
Arising from the acquisition of interests in IBG LLC	$	196	$	197	$	193
Deferred compensation		19		17		14
Other		35		31		34
Total deferred tax assets		250		245		241
Deferred tax liabilities
Foreign		3		4		2
Other		10		10		7
Total deferred tax liabilities		13		14		9
Net deferred tax assets	$	237	$	231	$	232

As of and for the years ended December 31, 2024 and 2023, the Company had no material valuation allowances on deferred tax assets.

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. As of December 31, 2024, the Company is no longer subject to U.S. Federal, State and Non-U.S. income tax examinations for tax years before 2011.

‎

As of December 31, 2024, accumulated earnings held by non-U.S. subsidiaries totaled $3.2 billion (as of December 31, 2023 $2.7 billion), of which $3.0 billion of such earnings are indefinitely reinvested abroad due to regulatory and other capital requirements and business needs in foreign jurisdictions. As a result, the Company has not provided for its proportionate share of additional foreign taxes or deferred U.S. tax on Internal Revenue Code (“IRC”) Section 986 gains/losses on previously taxed earnings and any local foreign withholding taxes associated with the repatriation of such earnings. If the Company were to record a deferred tax liability due to a hypothetical repatriation of such earnings, the estimated amount of such taxes would be up to $42 million as of December 31, 2024.