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

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

DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)

DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Tables)

12 Months Ended

Dec. 31, 2025

A summary of dividends accrued during the years ended December 31, 2025, 2024 and 2023 is as follows:


	Year Ended December 31,
		2025		2024		2023

		(in thousands, except per share amounts)
Regular quarterly dividends per share		$	1.40	$	1.45	$	1.40
Supplemental dividends per share		0.04		—		—
Total dividends per share		$	1.44	$	1.45	$	1.40

Total regular quarterly dividends		$	65,750	$	58,212	$	56,057
Total supplemental dividends		1,878		—		—
Total dividends		$	67,628	$	58,212	$	56,057

Schedule of Investment Company, Distribution To Shareholders

The tax character of distributions paid for the years ended December 31, 2025, 2024 and 2023 was as follows:


	Year Ended December 31,
	2025		2024		2023

	(in thousands)
Ordinary income	$	54,887	$	37,924	$	47,756
Qualified dividends	11,795		6,173		8,301
Distributions of long-term capital gains	946		14,114		—
Distributions on tax basis	$	67,628	$	58,211	$	56,057

Schedule of Distributable Earnings on Tax Basis

As of December 31, 2025, 2024 and 2023, the components of distributable earnings on a tax basis, or “Undistributed ordinary income,” differ from the amount of “Total overdistributed earnings” reflected in the Consolidated Balance Sheets by the temporary book or tax differences shown below:


	Year Ended December 31,
	2025		2024		2023

	(in thousands)
Undistributed ordinary income (1)	$	14,984	$	20,348	$	14,745
Net unrealized appreciation, net of tax	60,223		25,223		42,341
Cumulative book/tax differences on realized gain/loss, including capital loss carryforward	(55,499)		(38,572)		(43,438)
Accumulated net impact of Taxable Subsidiaries (2)	(55,768)		(67,544)		(75,468)
Other temporary differences (3)	(7,335)		(4,172)		(2,089)
Components of Total overdistributed earnings	$	(43,395)	$	(64,717)	$	(63,909)

_____________________________

(1)Undistributed ordinary income is comprised of the following:


	Year Ended December 31,
	2025		2024		2023

	(in thousands)
Taxable income earned prior to period end and carried forward for distribution next period	$	31,756	$	34,835	$	28,764
Dividend payable as of period end and paid in the following period	(16,772)		(14,487)		(14,019)
Undistributed ordinary income	$	14,984	$	20,348	$	14,745

(2)Accumulated net impact of earnings, intercompany dividends and book/tax differences of the Taxable Subsidiaries.

(3)Book income and tax income differences, including dividends, debt origination, structuring fees and changes in estimates.

Schedule of Taxable Income and to Total Distributions Declared to Common Stock Reconciliation

A reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the years ended December 31, 2025, 2024 and 2023 is as follows:


	Year Ended December 31,
	2025		2024		2023

	(estimated, in thousands)
Net increase in net assets resulting from operations	$	88,728	$	56,553	$	66,209
Net unrealized (appreciation) depreciation	(36,428)		15,439		(46,319)
Income tax provision	3,720		1,106		3,769
Pre-tax book income not consolidated for tax purposes	(24,972)		(9,622)		4,241
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates	31,216		339		22,228
Estimated taxable income (1)	62,264		63,815		50,128
Taxable income earned in prior year and carried forward for distribution in current year	20,348		14,745		20,674
Taxable income earned prior to period end and carried forward for distribution next period	(31,756)		(34,835)		(28,764)
Dividend payable as of period end and paid in the following period	16,772		14,487		14,019
Total distributions accrued or paid to common stockholders	$	67,628	$	58,212	$	56,057

_____________________________

(1)MSIF’s taxable income for each period is an estimate and will not be finally determined until MSIF files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate.

Schedule of Provision for Income Taxes

MSC Income’s provision for income taxes was comprised of the following for the years ended December 31, 2025, 2024 and 2023:


	Year Ended December 31,
		2025		2024		2023

		(in thousands)
Net investment income taxes
Current tax expense (benefit):
Federal		$	(1,426)	$	4,458	$	1
State and other		(429)		595		340
Excise		510		851		519
Total current tax expense (benefit)		(1,345)		5,904		860

Deferred tax expense (benefit):
Federal		4,829		(2,401)		1,219
State and other		286		(62)		102
Total deferred tax expense (benefit)		5,115		(2,463)		1,321

Total net investment income tax provision		$	3,770	$	3,441	$	2,181

Investment valuation related taxes
Current tax expense (benefit):
Federal		$	(526)	$	(915)	$	12


Total current tax expense (benefit)		(526)		(915)		12

Deferred tax expense (benefit):
Federal		(9)		(667)		2,231
State and other		485		(753)		(655)
Total deferred tax expense (benefit)		476		(1,420)		1,576

Total investment valuation related income tax provision (benefit)		$	(50)	$	(2,335)	$	1,588

Total income tax provision		$	3,720	$	1,106	$	3,769

Schedule of Income Taxes Paid (Net of Refunds Received)

MSC Income’s income taxes paid (net of refunds received) was comprised of the following for the years ended December 31, 2025, 2024 and 2023:


	Year Ended December 31,
	2025		2024		2023

	(in thousands)
Taxes Paid:
Federal and excise	$	5,818	$	538	$	1,030
State	191		171		973
Total taxes paid	$	6,009	$	709	$	2,003

Schedule of Deferred Tax Assets and Liabilities

The significant components of net deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:


	Year Ended December 31,
	2025		2024

	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	316	$	32
Interest expense carryforwards	5,351		4,514
General business and foreign tax credit carryforwards	9		9
Capital loss carryforwards	890		5,499
Other	17		—
Total deferred tax assets	6,584		10,054
Deferred tax liabilities:
Net basis differences in portfolio investments	3,631		4,324
Net unrealized appreciation of portfolio investments	(15,181)		(13,753)
Total deferred tax liabilities	(11,550)		(9,429)

Total deferred tax assets (liabilities), net	$	(4,966)	$	625