Income Taxes (Tables)

6 Months Ended

Jun. 30, 2020

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

Consumers Energy Company

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.