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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule Of Effective Income Tax Rate Reconciliation

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:


In Millions, Except Tax Rate
Years Ended December 31	2021				2020	2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823				$	809		$	764

Income tax expense at statutory rate		173					170			160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39					44			46
TCJA excess deferred taxes1		(50)					(35)			(31)
Production tax credits		(40)					(28)			(20)
Accelerated flow-through of regulatory tax benefits2		(28)					(13)			(13)
Research and development tax credits, net3		(3)					(11)			(2)
Refund of alternative minimum tax sequestration4		—					(9)			—
Other, net		4					(3)			(9)
Income tax expense		$	95				$	115		$	131
Effective tax rate		11.5		%			14.2		%	17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024				$	989		$	928

Income tax expense at statutory rate		215					208			195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54					47			53
TCJA excess deferred taxes1		(50)					(35)			(31)

Accelerated flow-through of regulatory tax benefits2		(28)					(13)			(13)
Production tax credits		(33)					(19)			(12)
Research and development tax credits, net3		(3)					(11)			(2)
Other, net		1					(4)			(5)
Income tax expense		$	156				$	173		$	185
Effective tax rate		15.2		%			17.5		%	19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 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.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 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.

Significant Components Of Income Tax Expense

Presented in the following table are the significant components of income tax expense on continuing operations:


In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

Principal Components Of Deferred Income Tax Assets And Liailities

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:


In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24


Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:


In Millions
	Tax Attribute	Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041

Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030

General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

Reconciliation Of Beginning And Ending Uncertain Tax Benefits

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:


In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—

Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—

Balance at end of period		$	34		$	31		$	34

Consumers Energy Company

Income Taxes [Line Items]