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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following is a reconciliation of income taxes at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):
Three months ended September 30,Nine months ended September 30,
2025202420252024
Amount% of EBTAmount% of EBTAmount% of EBTAmount% of EBT
Earnings before income taxes (“EBT”)
$268 $229 $694 $804 
Income taxes at statutory rate$57 21%$48 21%$146 21%$169 21%
Effect of:
Change in valuation allowance(6)(2%)(2)(1%)(6)(1%)(2)—%
Adjustment to prior year taxes(5)(2%)1 —%(5)(1%)1 —%
Tax exempt interest(1)—%(1)—%(3)—%(3)(1%)
Employee stock ownership plan dividend paid deduction— —%(1)—%(2)—%(3)(1%)
Dividends received deduction(1)—%— —%(2)—%(1)—%
Stock-based compensation— —%— —%(1)—%(2)—%
Nondeductible expenses
3 1%2 1%9 1%6 1%
Adjustment related to sale of subsidiary
— —%— —%7 1%4 1%
Foreign operations1 —%1 —%4 1%1 —%
Other5 2%— —%4 —%2 —%
Provision for income taxes as shown in the statement of earnings
$53 20%$48 21%$151 22%$172 21%
In the second quarter of 2025, AFG recorded $7 million in net tax expense related to a pending state income tax examination regarding the sale of a subsidiary in a prior year. In the second quarter of 2024, AFG recorded $4 million in net tax expense related to a pending IRS settlement regarding the sale of a different subsidiary in a prior year.

The One Big Beautiful Bill Act (enacted on July 4, 2025), among other things, extends many of the federal tax provisions of the 2017 Tax Cuts and Jobs Act and contains provisions that will accelerate the timing of certain tax deductions beginning in 2025 with an offsetting impact to deferred taxes and no impact on total income tax expense. Management is still evaluating the full impact of the bill, but does not expect the tax provisions of the bill to be material to AFG’s results of operations in future periods.