(4) INCOME TAXES

Income Tax Rates—The provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. Changes in state apportionment rates caused by the planned sale of Alliant Energy's RMT business also impacted the effective tax rates in 2012 for Alliant Energy, IPL and WPL. The income tax rates shown in the following table for the three months ended March 31 were computed by dividing income taxes by income from continuing operations before income taxes.


	2012			2011
Alliant Energy		39.0	%		22.3	%
IPL		125.4	%		5.9	%
WPL		44.1	%		32.5	%

State Apportionment—Alliant Energy, IPL and WPL utilize state apportionment projections to record their deferred tax assets and liabilities each reporting period. Deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts reported in the consolidated financial statements are recorded utilizing currently enacted tax rates and estimates of future state apportionment rates expected to be in effect at the time the temporary differences reverse. These state apportionment projections are most significantly impacted by the estimated amount of revenues expected in the future from each state jurisdiction for Alliant Energy's consolidated tax group, including both its regulated operations and its non-regulated operations. In the first quarter of 2012, Alliant Energy, IPL and WPL recorded $15.2 million, $8.1 million and $7.0 million, respectively, of deferred income tax expense due to changes in state apportionment projections caused by the planned sale of Alliant Energy's RMT business. These income tax expense amounts recognized in the first quarter of 2012 increased Alliant Energy's, IPL's and WPL's effective income tax rates for continuing operations for such period by 21.4%, 137.3% and 12.3%, respectively.

IPL's Tax Benefit Rider—In January 2011, the Iowa Utilities Board (IUB) approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three months ended March 31, 2012 and 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. In the first quarters of 2012 and 2011, $20 million and $7 million, respectively, of tax benefit rider-related regulatory liabilities were used to credit IPL's Iowa retail electric customers' bills. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2012 annual income tax rates for continuing operations by 12.2% and 37.5%, respectively. In the first quarter of 2011, the tax impacts of the tax benefit rider decreased Alliant Energy's and IPL's income tax rates for continuing operations by 8.9% and 22.9%, respectively.

Production Tax Credits—Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow—East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree—Phase I wind project, which began generating electricity in late 2010. For the three months ended March 31, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):


	Alliant Energy				IPL				WPL
	2012		2011		2012		2011		2012		2011
Whispering Willow—East (IPL)	$	3.6	$	2.8	$	3.6	$	2.8	$	—	$	—
Bent Tree—Phase I (WPL)		1.5		2.5		—		—		1.5		2.5
Cedar Ridge (WPL)		1.3		1.5		—		—		1.3		1.5

	$	6.4	$	6.8	$	3.6	$	2.8	$	2.8	$	4.0

Deferred Tax Assets and Liabilities—In the first quarter of 2012, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $46 million, $18 million and $26 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded in the first quarter of 2012 from bonus depreciation deductions available in 2012. These items were partially offset by increases in deferred tax assets recorded in the first quarter of 2012 as a result of increasing federal and state net operating loss carryforwards primarily due to such bonus depreciation deductions.

Bonus Depreciation Deductions—In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2012, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2012 federal income tax return will be approximately $418 million ($114 million for IPL and $203 million for WPL).

Carryforwards—At March 31, 2012, tax carryforwards and associated deferred tax assets and expiration dates were estimated as follows (in millions):


Alliant Energy	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	1,043		$	358			2028
Federal net operating losses offset—uncertain tax positions		(56	)		(20	)
State net operating losses		783			41			2014
State net operating losses offset—uncertain tax positions		(28	)		(2	)
Federal tax credits		116			114			2022

				$	491


IPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	475		$	163			2028
Federal net operating losses offset—uncertain tax positions		(25	)		(9	)
State net operating losses		189			11			2022
Federal tax credits		29			29			2022

				$	194


WPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	441		$	151			2028
Federal net operating losses offset—uncertain tax positions		(31	)		(11	)
State net operating losses		148			7			2022
State net operating losses offset—uncertain tax positions		(28	)		(2	)
Federal tax credits		30			29			2022

				$	174

Uncertain Tax Positions—It is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending March 31, 2013 as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes during the 12 months ending March 31, 2013 cannot be determined at this time.

Income Taxes

(4) INCOME TAXES

Income Tax Rates—The provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. Changes in state apportionment rates caused by the planned sale of Alliant Energy's RMT business also impacted the effective tax rates in 2012 for Alliant Energy, IPL and WPL. The income tax rates shown in the following table for the three months ended March 31 were computed by dividing income taxes by income from continuing operations before income taxes.


	2012			2011
Alliant Energy		39.0	%		22.3	%
IPL		125.4	%		5.9	%
WPL		44.1	%		32.5	%

State Apportionment—Alliant Energy, IPL and WPL utilize state apportionment projections to record their deferred tax assets and liabilities each reporting period. Deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts reported in the consolidated financial statements are recorded utilizing currently enacted tax rates and estimates of future state apportionment rates expected to be in effect at the time the temporary differences reverse. These state apportionment projections are most significantly impacted by the estimated amount of revenues expected in the future from each state jurisdiction for Alliant Energy's consolidated tax group, including both its regulated operations and its non-regulated operations. In the first quarter of 2012, Alliant Energy, IPL and WPL recorded $15.2 million, $8.1 million and $7.0 million, respectively, of deferred income tax expense due to changes in state apportionment projections caused by the planned sale of Alliant Energy's RMT business. These income tax expense amounts recognized in the first quarter of 2012 increased Alliant Energy's, IPL's and WPL's effective income tax rates for continuing operations for such period by 21.4%, 137.3% and 12.3%, respectively.

IPL's Tax Benefit Rider—In January 2011, the Iowa Utilities Board (IUB) approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three months ended March 31, 2012 and 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. In the first quarters of 2012 and 2011, $20 million and $7 million, respectively, of tax benefit rider-related regulatory liabilities were used to credit IPL's Iowa retail electric customers' bills. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2012 annual income tax rates for continuing operations by 12.2% and 37.5%, respectively. In the first quarter of 2011, the tax impacts of the tax benefit rider decreased Alliant Energy's and IPL's income tax rates for continuing operations by 8.9% and 22.9%, respectively.

Production Tax Credits—Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow—East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree—Phase I wind project, which began generating electricity in late 2010. For the three months ended March 31, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):


	Alliant Energy				IPL				WPL
	2012		2011		2012		2011		2012		2011
Whispering Willow—East (IPL)	$	3.6	$	2.8	$	3.6	$	2.8	$	—	$	—
Bent Tree—Phase I (WPL)		1.5		2.5		—		—		1.5		2.5
Cedar Ridge (WPL)		1.3		1.5		—		—		1.3		1.5

	$	6.4	$	6.8	$	3.6	$	2.8	$	2.8	$	4.0

Deferred Tax Assets and Liabilities—In the first quarter of 2012, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $46 million, $18 million and $26 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded in the first quarter of 2012 from bonus depreciation deductions available in 2012. These items were partially offset by increases in deferred tax assets recorded in the first quarter of 2012 as a result of increasing federal and state net operating loss carryforwards primarily due to such bonus depreciation deductions.

Bonus Depreciation Deductions—In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2012, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2012 federal income tax return will be approximately $418 million ($114 million for IPL and $203 million for WPL).

Carryforwards—At March 31, 2012, tax carryforwards and associated deferred tax assets and expiration dates were estimated as follows (in millions):


Alliant Energy	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	1,043		$	358			2028
Federal net operating losses offset—uncertain tax positions		(56	)		(20	)
State net operating losses		783			41			2014
State net operating losses offset—uncertain tax positions		(28	)		(2	)
Federal tax credits		116			114			2022

				$	491


IPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	475		$	163			2028
Federal net operating losses offset—uncertain tax positions		(25	)		(9	)
State net operating losses		189			11			2022
Federal tax credits		29			29			2022

				$	194


WPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	441		$	151			2028
Federal net operating losses offset—uncertain tax positions		(31	)		(11	)
State net operating losses		148			7			2022
State net operating losses offset—uncertain tax positions		(28	)		(2	)
Federal tax credits		30			29			2022

				$	174

Uncertain Tax Positions—It is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending March 31, 2013 as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes during the 12 months ending March 31, 2013 cannot be determined at this time.

Income Taxes

(4) INCOME TAXES

Income Tax RatesThe provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. Changes in state apportionment rates caused by the planned sale of Alliant Energy's RMT business also impacted the effective tax rates in 2012 for Alliant Energy, IPL and WPL. The income tax rates shown in the following table for the three months ended March 31 were computed by dividing income taxes by income from continuing operations before income taxes.


	2012			2011
Alliant Energy		39.0	%		22.3	%
IPL		125.4	%		5.9	%
WPL		44.1	%		32.5	%

State ApportionmentAlliant Energy, IPL and WPL utilize state apportionment projections to record their deferred tax assets and liabilities each reporting period. Deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts reported in the consolidated financial statements are recorded utilizing currently enacted tax rates and estimates of future state apportionment rates expected to be in effect at the time the temporary differences reverse. These state apportionment projections are most significantly impacted by the estimated amount of revenues expected in the future from each state jurisdiction for Alliant Energy's consolidated tax group, including both its regulated operations and its non-regulated operations. In the first quarter of 2012, Alliant Energy, IPL and WPL recorded $15.2 million, $8.1 million and $7.0 million, respectively, of deferred income tax expense due to changes in state apportionment projections caused by the planned sale of Alliant Energy's RMT business. These income tax expense amounts recognized in the first quarter of 2012 increased Alliant Energy's, IPL's and WPL's effective income tax rates for continuing operations for such period by 21.4%, 137.3% and 12.3%, respectively.

IPL's Tax Benefit RiderIn January 2011, the Iowa Utilities Board (IUB) approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three months ended March 31, 2012 and 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. In the first quarters of 2012 and 2011, $20 million and $7 million, respectively, of tax benefit rider-related regulatory liabilities were used to credit IPL's Iowa retail electric customers' bills. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2012 annual income tax rates for continuing operations by 12.2% and 37.5%, respectively. In the first quarter of 2011, the tax impacts of the tax benefit rider decreased Alliant Energy's and IPL's income tax rates for continuing operations by 8.9% and 22.9%, respectively.

Production Tax CreditsAlliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering WillowEast wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent TreePhase I wind project, which began generating electricity in late 2010. For the three months ended March 31, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):


	Alliant Energy				IPL				WPL
	2012		2011		2012		2011		2012		2011
Whispering WillowEast (IPL)	$	3.6	$	2.8	$	3.6	$	2.8	$		$
Bent TreePhase I (WPL)		1.5		2.5						1.5		2.5
Cedar Ridge (WPL)		1.3		1.5						1.3		1.5

	$	6.4	$	6.8	$	3.6	$	2.8	$	2.8	$	4.0

Deferred Tax Assets and LiabilitiesIn the first quarter of 2012, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $46 million, $18 million and $26 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded in the first quarter of 2012 from bonus depreciation deductions available in 2012. These items were partially offset by increases in deferred tax assets recorded in the first quarter of 2012 as a result of increasing federal and state net operating loss carryforwards primarily due to such bonus depreciation deductions.

Bonus Depreciation DeductionsIn 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2012, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2012 federal income tax return will be approximately $418 million ($114 million for IPL and $203 million for WPL).

CarryforwardsAt March 31, 2012, tax carryforwards and associated deferred tax assets and expiration dates were estimated as follows (in millions):


Alliant Energy	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	1,043		$	358			2028
Federal net operating losses offsetuncertain tax positions		(56	)		(20	)
State net operating losses		783			41			2014
State net operating losses offsetuncertain tax positions		(28	)		(2	)
Federal tax credits		116			114			2022

				$	491


IPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	475		$	163			2028
Federal net operating losses offsetuncertain tax positions		(25	)		(9	)
State net operating losses		189			11			2022
Federal tax credits		29			29			2022

				$	194


WPL	Carryforward Amount			Deferred Tax Assets			Earliest Expiration Date
Federal net operating losses	$	441		$	151			2028
Federal net operating losses offsetuncertain tax positions		(31	)		(11	)
State net operating losses		148			7			2022
State net operating losses offsetuncertain tax positions		(28	)		(2	)
Federal tax credits		30			29			2022

				$	174

Uncertain Tax PositionsIt is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending March 31, 2013 as a result of the expected issuance in 2012 of revenue procedures clarifying the treatment of repair expenditures for electric generation and gas distribution property. An estimate of the expected changes during the 12 months ending March 31, 2013 cannot be determined at this time.