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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

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	2022				2021	2020
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	902				$	823		$	809

Income tax expense at statutory rate		189					173			170
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		51					39			44
TCJA excess deferred taxes1		(65)					(50)			(35)
Production tax credits		(45)					(40)			(28)
Accelerated flow-through of regulatory tax benefits2		(39)					(28)			(13)
Research and development tax credits, net3		(2)					(3)			(11)
Refund of alternative minimum tax sequestration4		—					—			(9)
Other, net		4					4			(3)
Income tax expense		$	93				$	95		$	115
Effective tax rate		10.3		%			11.5		%	14.2		%
Consumers
Income from continuing operations before income taxes		$	1,085				$	1,024		$	989

Income tax expense at statutory rate		228					215			208
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		59					54			47
TCJA excess deferred taxes1		(65)					(50)			(35)

Accelerated flow-through of regulatory tax benefits2		(39)					(28)			(13)
Production tax credits		(40)					(33)			(19)
Research and development tax credits, net3		(1)					(3)			(11)
Other, net		(2)					1			(4)
Income tax expense		$	140				$	156		$	173
Effective tax rate		12.9		%			15.2		%	17.5		%

1In 2020, the MPSC authorized Consumers to accelerate the amortization of a gas 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, has now been fully amortized.

2In 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, have now been fully amortized.

3In 2022, CMS Energy finalized a study of research and development tax credits for tax years 2019 through 2021. As a result, Consumers recognized a $1 million decrease in the credit, net of reserves for uncertain tax positions. There was no impact at the consolidated level. In 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 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	2022			2021			2020
CMS Energy, including Consumers
Current income taxes
Federal		$	6		$	(1)		$	(35)
State and local		—			1			(2)
		$	6		$	—		$	(37)
Deferred income taxes
Federal		4			49			100
State and local		65			49			57
		$	69		$	98		$	157
Deferred income tax credit		18			(3)			(5)
Tax expense		$	93		$	95		$	115
Consumers
Current income taxes
Federal		$	(2)		$	(13)		$	3
State and local		8			15			(7)
		$	6		$	2		$	(4)
Deferred income taxes
Federal		50			103			115
State and local		66			54			67
		$	116		$	157		$	182
Deferred income tax credit		18			(3)			(5)
Tax expense		$	140		$	156		$	173

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	2022			2021
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	385		$	332
Net regulatory tax liability		318			349
Reserves and accruals		35			32
Total deferred income tax assets		$	738		$	713
Valuation allowance		(2)			(2)
Total deferred income tax assets, net of valuation allowance		$	736		$	711
Deferred income tax liabilities
Plant, property, and equipment		$	(2,515)		$	(2,395)
Employee benefits		(433)			(399)
Gas inventory		(53)			(22)
Securitized costs		(39)			(46)
Other		(103)			(59)
Total deferred income tax liabilities		$	(3,143)		$	(2,921)
Total net deferred income tax liabilities		$	(2,407)		$	(2,210)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	318		$	349
Tax loss and credit carryforwards		145			134
Reserves and accruals		28			24


Total deferred income tax assets		$	491		$	507
Deferred income tax liabilities
Plant, property, and equipment		$	(2,458)		$	(2,341)
Employee benefits		(423)			(388)
Gas inventory		(53)			(22)
Securitized costs		(39)			(46)
Other		(103)			(50)
Total deferred income tax liabilities		$	(3,076)		$	(2,847)
Total net deferred income tax liabilities		$	(2,585)		$	(2,340)

Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2022:


In Millions
	Tax Attribute	Expiration
CMS Energy, including Consumers

State net operating loss carryforwards		$	60	2030 – 2032
Local net operating loss carryforwards		3		2024 – 2040
General business credits		320		2035 – 2042

Federal charitable contribution carryforwards		2		2025

Total tax attributes		$	385
Consumers

State net operating loss carryforwards		$	46	2030

General business credits		99		2035 – 2042


Total tax attributes		$	145

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	2022			2021			2020
CMS Energy, including Consumers
Balance at beginning of period		$	27		$	25		$	23
Additions for current-year tax positions		1			2			1
Additions for prior-year tax positions		1			—			3
Reductions for prior-year tax positions		(1)			—			(2)

Balance at end of period		$	28		$	27		$	25
Consumers
Balance at beginning of period		$	34		$	31		$	34
Additions for current-year tax positions		3			3			1
Additions for prior-year tax positions		1			—			4
Reductions for prior-year tax positions		(2)			—			(8)

Balance at end of period		$	36		$	34		$	31

Consumers Energy Company

Income Taxes [Line Items]