114 Large Companies Pay No Federal Tax in 2025
A new analysis reveals that over 100 major U.S. firms paid zero federal income tax on billions in profits during 2025.
Updated on Oct. 29, 2026 in Corporate Finance
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The Institute on Taxation and Economic Policy found that 114 profitable large public companies paid no federal income tax in 2025. These firms were part of a broader study of 706 companies that collectively generated $1.88 trillion in profits.
Why it matters
While the federal corporate tax rate is set at 21%, many companies legally reduce their liability to zero using tax breaks and incentives established by law. This gap between the statutory rate and what large corporations actually pay continues to be a subject of intense debate regarding federal revenue.
The 706 studied companies paid $196 billion in federal taxes, resulting in an effective tax rate of 10.4%. This is significantly lower than the 21% statutory corporate tax rate, driven by $198 billion in total corporate tax subsidies.
The players
Institute on Taxation and Economic Policy
This is a non-partisan research organization that analyzes the impacts of tax policy on society and the economy.
Citigroup
This is a multinational investment bank and financial services corporation headquartered in New York City.
CVS Health
This is an American healthcare company that owns a pharmacy chain and a pharmacy benefits manager.
Tesla
This is an American electric vehicle and clean energy company based in Texas.
United Airlines
This is a major American airline that operates an extensive domestic and international route network.
The details
Corporations frequently lower their tax burdens by utilizing accelerated depreciation, which allows them to write off the costs of equipment and factory purchases in a single year. Major firms including Citigroup, CVS Health, Duke Energy, Tesla, and United Airlines recorded substantial profits while operating under these current tax structures.
Timeline
2013-2021 saw the average corporate tax rate drop from 22% to 12.8%.
2017 marked the enactment of major tax cuts.
2025 is the year 114 companies recorded zero federal income tax payments.
Market Dynamics
This trend highlights the ongoing friction between the Tax Cuts and Jobs Act of 2017 and federal revenue collection. The current results follow the pattern of tax minimization enabled by the provisions established under this landmark law.
For the retail investor, these effective tax rates can signal higher net profit margins and potential for reinvestment or dividend growth. However, the disparity in tax contributions often fuels legislative uncertainty that may lead to future changes in tax code compliance requirements.
The takeaway
Understanding corporate tax strategies is essential for evaluating the financial health and long-term tax risks of major public companies. Readers should monitor future legislative discussions, as shifts in tax law could quickly alter these effective rates and corporate profit outlooks.
Further reading
Learn more about how companies manage their fiscal obligations in the Corporate Finance section.
Source note: This article includes information reported by MyrtleBeachOnline.
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