The Tax Cuts and Jobs Act enacted in December 2017 changed several aspects of corporate taxation, including decreasing our federal corporate statutory tax rate from 35% to 21%, limiting the amount of interest the Company could potentially deduct and eliminating the corporate AMT. The elimination of the corporate AMT allowed the Company to claim AMT refunds for AMT credits carried forward from prior tax years. The CARES Act enacted in March 2020 permitted the Company to carry back its NOL generated in 2018 and 2019, creating additional AMT credits, and to accelerate all of its AMT refunds. Guidance issued by the relevant regulatory authorities regarding tax legislation may materially impact QEP's financial statements. As additional guidance to the Tax Cuts and Jobs Act and the CARES Act is published in the form of Treasury Regulations and other IRS communications, the Company will monitor, assess and determine the impact of these communications on the Company's consolidated financial statements and statements of operations.


	Year Ended December 31,
	2020		2019		2018
Federal income tax provision (benefit)	(in millions)
Current	$	(189.5)	$	(32.2)	$	(71.3)
Deferred	116.0		55.7		(257.8)
State income tax provision (benefit)
Current	(1.0)		(15.1)		1.5
Deferred	(5.4)		(51.4)		10.2
Total income tax provision (benefit)	$	(79.9)	$	(43.0)	$	(317.4)


	Year Ended December 31,
	2020		2019		2018
Federal income taxes statutory rate	21.0	%	21.0	%	21.0	%
Increase (decrease) in rate as a result of:
State income taxes, net of federal income tax benefit	(1.6)	%	(2.5)	%	4.1	%

State rate change(1)	8.0	%	20.9	%	(2.9)	%
Valuation allowance(2)	3.3	%	(18.0)	%	(1.9)	%
Permanent adjustments(3)	(7.2)	%	(7.1)	%	(0.1)	%
Return to provision adjustment	1.1	%	2.7	%	(0.1)	%
Uncertain tax provision(4)	—	%	13.6	%	—	%
NOL rate re-measurements(5)	79.6	%	—	%	3.8	%
Effective income tax rate	104.2	%	30.6	%	23.9	%

(1)During the year ended December 31, 2020, the state rate change was primarily the result of the re-measurement of QEP's deferred tax assets and liabilities at a lower blended state rate due to the changing apportionment of the Company's revenues and property in its remaining operating areas. During the year ended December 31, 2019, the state rate change was primarily the result of the re-measurement of QEP's deferred tax assets and liabilities at a lower blended state tax rate due to exiting the state of Louisiana.

(2)During the year ended December 31, 2019, the Company recognized an additional valuation allowance of $25.3 million on its Louisiana state NOL. The Company did not expect that it would have sufficient taxable income to utilize the state NOL it is carrying forward due to the Haynesville Divestiture. During the year ended December 31, 2018, the Company also increased its valuation allowance by $25.5 million against its Louisiana net operating loss as the Company did not forecast sufficient taxable income to utilize the entire net operating loss in Louisiana at December 31, 2018.

(3)During the years ended December 31, 2020, and 2019, the permanent items primarily related to disallowed officer compensation under Section 162(m) of the Internal Revenue Code of $1.9 million and $6.1 million and share-based compensation shortfalls of $3.6 million and $4.0 million, respectively.

(5)During the year ended December 31, 2020, QEP had a remeasurement of deferred taxes due to NOL carrybacks under the CARES Act to a year with a higher federal tax rate. This remeasurement provided a tax benefit of $61.0 million during the year ended December 31, 2020. During the year ended December 31, 2018, QEP agreed to an IRS proposed change to the initial treatment of the 2016 carryback of NOL. This change resulted in a reduction of available NOL carryforwards valued at $75.7 million and an increase in AMT credit carryforwards of $126.0 million. The net change in value of $50.3 million was recorded in deferred income taxes.


	December 31,
	2020		2019
Deferred tax liabilities	(in millions)
Property, plant and equipment	$	627.5	$	592.9

Operating lease right-of-use assets	10.7		12.7
Other	2.4		0.9
Total deferred tax liabilities	640.6		606.5
Deferred tax assets
NOL and tax credit carryforwards	$	306.2	$	337.7
State NOL valuation allowance	(101.9)		(98.8)
Employee benefits and compensation costs	15.9		22.3
Interest carryforward (1)	—		45.7
Commodity price derivatives	17.0		3.9
Operating lease liabilities	11.7		14.1
Other	6.5		7.1
Total deferred tax assets	255.4		332.0
Net deferred income tax liability	$	385.2	$	274.5
Balance sheet classification
Deferred income tax liability – noncurrent	385.2		274.5
Net deferred income tax liability	$	385.2	$	274.5

(1)The decrease in the interest expense carry forward is due to the issuance of final regulations by the U.S. Department of Treasury in July 2020 that relate to the deductibility of interest expense. After the application of these regulations the Company expects to fully deduct all of its remaining interest that was carried forward at December 31, 2019.

As of December 31, 2020, the Company had a gross U.S. NOL of $863.5 million and various gross state NOL's of $5,059.8 million. The tax effected amounts and expiration dates of NOL and tax credit carryforwards at December 31, 2020, are as follows:


	Expiration Dates	Amounts
		(in millions)
State NOL and tax credit carryforwards	2021-Indefinite	$	121.1
U.S. NOL(1)	2037-Indefinite	181.3
General business credits	2036-2037	3.8
Total NOL and tax credit carryforwards		$	306.2

(1)Federal NOLs created in tax years beginning after December 31, 2017 can be carried forward indefinitely under the Tax Cuts and Jobs Act (limited to 80% of taxable income computed without the NOL deduction). Of the Company's U.S. NOL, $18.7 million has an indefinite carryforward period but its use is limited to 80% of taxable income.

The Company assesses the available positive and negative evidence to determine if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company maintains a valuation allowance to offset the uncertain realization of certain of its state NOL's on the basis that they are not more likely than not to be realized. The Company had a valuation allowance of $101.9 million and $98.8 million as of December 31, 2020 and 2019, respectively, for state NOL's outside of our current core operations and primarily relate to state NOL's in Colorado, Louisiana, Utah and Oklahoma. Due to the various divestitures over the last several years, and focus of our operations, we do not expect to have sufficient taxable income in these states to utilize the NOL's we are carrying forward.

The Tax Cuts and Jobs Act eliminated corporate AMT which allowed QEP the ability to offset its regular tax liability or claim refunds for taxable years 2018 through 2021 for AMT credits carried forward from prior years. The CARES Act permitted the Company to carry back its NOL generated in 2018 and 2019, creating additional AMT credits, and to accelerate all of its AMT refunds. The Company received $170.7 million, including interest income, and $73.9 million of AMT credit refunds in 2020 and 2019, respectively, and anticipates it will realize approximately $61.6 million in AMT credit refunds, with $30.7 million expected to be realized within the next 12 months, which is shown in "Income tax receivable" with the remaining $30.9 million included in "Other noncurrent assets" on the balance sheets as of December 31, 2020.

Pursuant to Section 382 and 383 of the Internal Revenue Code, utilization of the Company’s NOL's and credits may be subject to annual limitations in the event of any significant future changes in its ownership structure. These annual limitations may result in the expiration of NOL's and credits prior to utilization.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. For federal tax purposes, the Company has been a participant in the IRS Compliance Assurance Process through the 2019 tax year, which provides examination of the tax return either prior to or post filing. Generally, for state tax purposes, the Company’s 2017 through 2019 tax years remain open for examination by the taxing authorities under a three-year statute of limitations. Should the Company utilize any of its state loss carryforwards, their carryforward losses would be subject to examination.

The benefits of uncertain tax positions taken or expected to be taken on income tax returns is recognized in the Consolidated Financial Statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authorities.

During the year ended December 31, 2019, the statute of limitations related to the Company's uncertain tax position expired, and upon expiration, the Company recognized a $19.0 million tax benefit and recorded a $4.1 million reduction in "Interest expense" and a $2.5 million reduction in "General and administrative" expense on the statements of operations related to accrued interest and penalties that were recorded in prior periods. During the year ended December 31, 2018 the Company incurred $0.7 million of estimated interest expense related to uncertain tax positions.