Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 — Income Taxes

Effective Tax Rates

The following tables summarize the effective income tax rates from continuing operations for Cleco and Cleco Power for the three and nine months ended September 30, 2023, and 2022:

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2023		2022		2023		2022
Effective tax rate	(470.9)	%	9.3	%	1,006.9	%	9.8	%

Cleco Power
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2023		2022		2023		2022
Effective tax rate	(0.6)	%	4.4	%	2.6	%	4.1	%

For Cleco and Cleco Power, the effective income tax rates for the three and nine months ended September 30, 2023, and 2022, were different than the federal statutory rate primarily due to the amortization of excess ADIT, the adjustment to record tax expense at the projected annual effective tax rate, adjustments for tax returns as filed, flow through of state tax benefits, permanent deductions, and state tax expense.

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. For the three and nine months ended September 30, 2023, and 2022, Cleco and Cleco Power had no interest expense related to uncertain tax positions. At September 30, 2023, and December 31, 2022, Cleco and Cleco Power had no liability for uncertain tax positions or interest payable related to uncertain tax positions.

Income Tax Audits

Cleco participates in the IRS’s Compliance Assurance Process in which tax positions are examined and agreed upon prior to filing the federal tax return. While the statute of limitations remains open for tax years 2020, 2021, and 2022, the IRS has placed Cleco in the Bridge phase of the Compliance Assurance Process for the 2020 and 2021 tax years. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. These tax returns were filed consistent with the IRS’s review. The IRS has accepted Cleco’s application for the Compliance Assurance Process for the 2022 tax year and the Compliance Assurance Maintenance phase for the 2023 tax year. In this maintenance phase, the IRS typically will, at its discretion, reduce the level of its review of the tax year relative to the regular Compliance Assurance Process phase.

The state income tax years 2020, 2021, and 2022 remain subject to examination by the Louisiana Department of Revenue.

Cleco classifies income tax penalties as a component of other expense. For the three and nine months ended September 30, 2023, and 2022, no penalties were recognized.