INCOME TAXES

The following table presents the principal reasons for the difference between the effective income tax rate and the statutory federal income tax rate for the years ended December 31, 2016, 2015, and 2014:



	Ameren Missouri		Ameren Illinois		Ameren
2016
Statutory federal income tax rate:	35	%	35	%	35	%
Increases (decreases) from:
Depreciation differences	1		—		—
Amortization of deferred investment tax credit	(1	)	—		—
State tax	3		5		4
Stock-based compensation^(a)	—		—		(2	)
Valuation allowance	—		—		1
Other permanent items	—		(2	)	(1	)
Effective income tax rate	38	%	38	%	37	%
2015
Statutory federal income tax rate:	35	%	35	%	35	%
Increases (decreases) from:
Depreciation differences	—		(2	)	(1	)
Amortization of deferred investment tax credit	(1	)	—		(1	)
State tax	3		5		5
Other permanent items	—		(1	)	—
Effective income tax rate	37	%	37	%	38	%
2014
Statutory federal income tax rate:	35	%	35	%	35	%
Increases (decreases) from:
Amortization of deferred investment tax credit	(1	)	—		(1	)
State tax	3		6		4
Other permanent items	—		—		1
Effective income tax rate	37	%	41	%	39	%


(a)	Reflects the adoption of new authoritative accounting guidance related to share-based compensation. See Note 1 – Summary of Significant Accounting Policies for more information.

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2016, 2015, and 2014:



	Ameren Missouri			Ameren Illinois			Other			Ameren
2016
Current taxes:
Federal	$	31		$	(8	)	$	(24	)	$	(1	)
State	6			12			(21		)	(3		)
Deferred taxes:
Federal	161			117			21			299
State	23			37			32			92
Amortization of deferred investment tax credits	(5		)	—			—			(5		)
Total income tax expense	$	216		$	158		$	8		$	382
2015
Current taxes:
Federal	$	110		$	(83	)	$	(29	)	$	(2	)
State	17			(11		)	(10		)	(4		)
Deferred taxes:
Federal	71			193			35			299
State	16			29			31			76
Amortization of deferred investment tax credits	(5		)	(1		)	—			(6		)
Total income tax expense	$	209		$	127		$	27		$	363
2014
Current taxes:
Federal	$	(13	)	$	(51	)	$	27		$	(37	)
State	(3		)	(2		)	(32		)	(37		)
Deferred taxes:
Federal	222			159			(12		)	369
State	28			38			22			88
Amortization of deferred investment tax credits	(5		)	(1		)	—			(6		)
Total income tax expense (benefit)	$	229		$	143		$	5		$	377

The Illinois corporate income tax rate was 9.5% in 2014. The tax rate decreased to 7.75% on January 1, 2015, and is scheduled to decrease to 7.3% on January 1, 2025.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2016 and 2015:



	Ameren Missouri			Ameren Illinois			Other			Ameren
2016
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,103		$	1,769		$	147		$	5,019
Regulatory assets, net	75			(1		)	—			74
Deferred employee benefit costs	(76		)	(38		)	(97		)	(211		)
Revenue requirement reconciliation adjustments	—			34			—			34
Tax carryforwards	(66		)	(138		)	(472		)	(676		)
Other	(23		)	5			42			24
Total net accumulated deferred income tax liabilities (assets)	$	3,013		$	1,631		$	(380	)	$	4,264
2015
Accumulated deferred income taxes, net liability (asset):
Plant related	$	2,931		$	1,587		$	37		$	4,555
Regulatory assets, net	81			(1		)	—			80
Deferred employee benefit costs	(76		)	(40		)	(91		)	(207		)
Revenue requirement reconciliation adjustments	—			66			—			66
Tax carryforwards	(65		)	(133		)	(405		)	(603		)
Other	(27		)	1			20			(6		)
Total net accumulated deferred income tax liabilities (assets)	$	2,844		$	1,480		$	(439	)	$	3,885

The following table presents the components of deferred tax assets relating to net operating loss carryforwards, tax credit carryforwards, and charitable contribution carryforwards at December 31, 2016 and 2015:



	Ameren Missouri		Ameren Illinois		Other			Ameren
2016
Net operating loss carryforwards:
Federal^(a)	$	33	$	137	$	324		$	494
State^(a)	4		—		41			45
Total net operating loss carryforwards	$	37	$	137	$	365		$	539
Tax credit carryforwards:
Federal^(a)	$	29	$	1	$	79		$	109
State^(b)	—		—		21			21
Total tax credit carryforwards	$	29	$	1	$	100		$	130
Charitable contribution carryforwards^(b)	$	—	$	—	$	18		$	18
Valuation allowance^(c)	—		—		(11		)	(11		)
Total charitable contribution carryforwards	$	—	$	—	$	7		$	7
2015
Net operating loss carryforwards:
Federal	$	35	$	127	$	245		$	407
State	4		4		38			46
Total net operating loss carryforwards	$	39	$	131	$	283		$	453
Tax credit carryforwards:
Federal	$	26	$	1	$	78		$	105
State	—		1		40			41
State valuation allowance	—		—		(2		)	(2		)
Total tax credit carryforwards	$	26	$	2	$	116		$	144
Charitable contribution carryforwards	$	—	$	—	$	10		$	10
Valuation allowance	—		—		(4		)	(4		)
Total charitable contribution carryforwards	$	—	$	—	$	6		$	6


(a)	Will expire between 2029 and 2036.


(b)	Will expire between 2017 and 2021.


(c)	See Schedule II under Part IV, Item 15, in this report for information on changes in the valuation allowance.

Uncertain Tax Positions

As of December 31, 2016 and 2015, the Ameren Companies did not record any uncertain tax positions. The settlements discussed below resolved previously recorded uncertain tax positions.

In 2015, final settlements for tax years 2012 and 2013 were reached with the IRS. The 2015 settlement of the 2013 tax year impacted discontinued operations. See Note 1 – Summary of Significant Accounting Policies for additional information.

In 2014, final settlements for tax years 2007 through 2011 were reached with the IRS. These settlements, which resolved the uncertain tax positions associated with the timing of research tax deductions for these years, resulted in a decrease in Ameren’s and Ameren Missouri’s unrecognized tax benefits of $20 million, and $13 million, respectively. In addition, the settlement for tax years 2007 through 2011 provided certainty for the previously uncertain tax positions associated with the timing of research tax deductions for the remaining open tax years of 2012, 2013, and 2014. The certainty provided from the settlement resulted in an $18 million decrease in both Ameren’s and Ameren Missouri’s unrecognized tax benefits. The settlement also resulted in a $2 million increase to Ameren’s state unrecognized tax benefits. The net reduction in unrecognized tax benefits in 2014 did not materially affect income tax expense for the Ameren Companies.

State income tax returns are generally subject to examination for a period of three years after filing. The state impact of any federal changes remains subject to examination by various states for up to one year after formal notification to the states. The Ameren Companies currently do not have material state income tax issues under examination, administrative appeals, or litigation.

Ameren Missouri has an uncertain tax position tracker. Under Missouri's regulatory framework, uncertain tax positions do not reduce Ameren Missouri's electric rate base. When an uncertain income tax position liability is resolved, the MoPSC requires, through the uncertain tax position tracker, the creation of a regulatory asset or regulatory liability to reflect the time value, using the weighted-average cost of capital included in each of the electric rate orders in effect before the tax position was resolved, of the difference between the uncertain tax position liability that was excluded from rate base and the final tax liability. The resulting regulatory asset or liability will affect earnings in the year it is created and then will be amortized over three years, beginning on the effective date of new rates established in the next electric rate case.