Income Taxes |
3 Months Ended |
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Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES FirstEnergy’s interim effective tax rates reflect the estimated annual effective tax rates for 2020 and 2019. These tax rates are affected by estimated annual permanent items, such as AFUDC equity and other flow-through items, as well as discrete items that may occur in any given period but are not consistent from period to period. FirstEnergy’s effective tax rate on continuing operations for the three months ended March 31, 2020 and 2019, was 166.7% and 20.8%, respectively. The change in effective tax rate was primarily due to a $52 million reduction in valuation allowances from the recognition of deferred gains on prior intercompany generation asset transfers that were triggered by the FES Debtors’ emergence from bankruptcy in the first quarter of 2020 and subsequent deconsolidation from FirstEnergy’s consolidated federal income tax group. See Note 3, “Discontinued Operations,” for other tax matters relating to the FES Bankruptcy that were recognized in discontinued operations. During the three months ended March 31, 2020, FirstEnergy remeasured its reserve for uncertain tax positions for federal and state tax benefits related to the worthless stock deduction, resulting in a net decrease to the reserve of approximately $28 million, none of which had an impact on the effective tax rate. As of March 31, 2020, it is reasonably possible that FirstEnergy could record a net decrease to its reserve for uncertain tax positions by approximately $59 million within the next twelve months due to the statute of limitations expiring or resolution with taxing authorities, of which approximately $57 million would impact FirstEnergy’s effective tax rate. |