Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Missouri Income Tax Rate

In 2018, legislation modifying Missouri tax law was enacted to decrease the state’s corporate income tax rate from 6.25% to 4%, effective January 1, 2020. As a result, in 2018, Ameren’s and Ameren Missouri’s accumulated deferred tax balances were revalued, resulting in a net decrease of $122 million to their accumulated deferred tax liability, which was offset by a regulatory liability. Additionally, Ameren recorded an immaterial amount to income tax expense. As a result of the March 2020 rate order, the effect of this tax decrease was reflected in customer rates on April 1, 2020. This income tax decrease did not have a material impact on the net income of Ameren (parent) and nonregistrant subsidiaries.

The following table presents the principal reasons for the difference between the effective income tax rate and the federal statutory corporate income tax rate for the years ended December 31, 2020, 2019, and 2018:

	Ameren Missouri		Ameren Illinois		Ameren
2020
Federal statutory corporate income tax rate	21	%	21	%	21	%
Increases (decreases) from:
Amortization of excess deferred income taxes	(16)		(3)		(9)
Amortization of deferred investment tax credit	(1)		(1)		(1)
State tax	3		7		5
Stock-based compensation	—		—		(1)
Effective income tax rate	7	%	24	%	15	%
2019
Federal statutory corporate income tax rate	21	%	21	%	21	%
Increases (decreases) from:
Amortization of excess deferred income taxes	(11)		(4)		(7)
Amortization of deferred investment tax credit	(1)		—		(1)
State tax	5		7		6
Stock-based compensation	—		—		(1)
Effective income tax rate	14	%	24	%	18	%
2018
Federal statutory corporate income tax rate	21	%	21	%	21	%
Increases (decreases) from:
Amortization of excess deferred income taxes	(4)		(4)		(4)
Depreciation differences	—		(1)		—
Amortization of deferred investment tax credit	(1)		—		(1)
State tax	4		7		6
TCJA	1		1		1
Tax credits	(1)		—		—
Other permanent items	—		—		(1)
Effective income tax rate	20	%	24	%	22	%

The following table presents the components of income tax expense for the years ended December 31, 2020, 2019, and 2018:

	Ameren Missouri		Ameren Illinois		Other		Ameren
2020
Current taxes:
Federal	$	14	$	12	$	(24)	$	2
State	3		(6)		8		5
Deferred taxes:
Federal	82		81		24		187
State	15		52		(10)		57
Amortization of excess deferred income taxes	(75)		(15)		(1)		(91)
Amortization of deferred investment tax credits	(5)		—		—		(5)
Total income tax expense	$	34	$	124	$	(3)	$	155
2019
Current taxes:
Federal	$	65	$	19	$	(88)	$	(4)
State	22		11		(14)		19
Deferred taxes:
Federal	37		66		82		185
State	5		29		25		59
Amortization of excess deferred income taxes	(56)		(15)		(1)		(72)
Amortization of deferred investment tax credits	(5)		—		—		(5)
Total income tax expense	$	68	$	110	$	4	$	182
2018
Current taxes:
Federal	$	104	$	4	$	(118)	$	(10)
State	29		6		(12)		23
Deferred taxes:
Federal	22		75		123		220
State	(2)		28		23		49
Amortization of excess deferred income taxes	(24)		(15)		(1)		(40)
Amortization of deferred investment tax credits	(5)		—		—		(5)
Total income tax expense	$	124	$	98	$	15	$	237

The following table presents the accumulated deferred income tax assets and liabilities recorded as a result of temporary differences and accumulated deferred investment tax credits at December 31, 2020 and 2019:

	Ameren Missouri		Ameren Illinois		Other		Ameren
2020
Accumulated deferred income taxes, net liability (asset):
Plant-related	$	2,112	$	1,559	$	205	$	3,876
Regulatory assets and liabilities, net	(285)		(207)		(23)		(515)
Deferred employee benefit costs	(58)		8		(54)		(104)
Tax carryforwards	(26)		(6)		(65)		(97)
Other	(35)		13		39		17
Total net accumulated deferred income tax liabilities (assets)	1,708		1,367		102		3,177
Accumulated deferred investment tax credits	34		—		—		34
Accumulated deferred income taxes and investment tax credits	$	1,742	$	1,367	$	102	$	3,211
2019
Accumulated deferred income taxes, net liability (asset):
Plant-related	$	2,000	$	1,423	$	193	$	3,616
Regulatory assets and liabilities, net	(310)		(214)		(24)		(548)
Deferred employee benefit costs	(59)		7		(59)		(111)
Tax carryforwards	(25)		(3)		(70)		(98)
Other	(33)		11		43		21
Total net accumulated deferred income tax liabilities (assets)	1,573		1,224		83		2,880
Accumulated deferred investment tax credits	39		—		—		39
Accumulated deferred income taxes and investment tax credits	$	1,612	$	1,224	$	83	$	2,919

The following table presents the components of accumulated deferred income tax assets relating to net operating loss carryforwards, tax credit carryforwards, and charitable contribution carryforwards at December 31, 2020 and 2019:

	Ameren Missouri		Ameren Illinois		Other		Ameren
2020
Net operating loss carryforwards:
State(a)	$	—	$	3	$	4	$	7
Total net operating loss carryforwards	$	—	$	3	$	4	$	7
Tax credit carryforwards:
Federal(b)	$	26	$	3	$	54	$	83
State(c)	—		—		7		7
Total tax credit carryforwards	$	26	$	3	$	61	$	90
Charitable contribution carryforwards(c)	$	—	$	—	$	3	$	3
Valuation allowance(d)	—		—		(3)		(3)
Total charitable contribution carryforwards	$	—	$	—	$	—	$	—
2019
Tax credit carryforwards:
Federal	$	25	$	3	$	67	$	95
State	—		—		3		3
Total tax credit carryforwards	$	25	$	3	$	70	$	98
Charitable contribution carryforwards	$	—	$	—	$	3	$	3
Valuation allowance	—		—		(3)		(3)
Total charitable contribution carryforwards	$	—	$	—	$	—	$	—

(a)Will expire 2032.

(b)Will expire between 2030 and 2040.

(c)Will expire between 2021 and 2025.

(d)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, 2020 and 2019, the Ameren Companies did not record any uncertain tax positions.

Ameren is a part of the IRS’s compliance assurance process program, which involves real-time review of compliance with federal income tax law. 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. Ameren’s federal tax returns for the 2015, 2017, 2018, and 2019 tax years are open, but, at the time of this filing, the Ameren Companies do not have material 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, with a return at the applicable WACC 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. It will then be amortized over three years, beginning on the effective date of new rates established in the next electric service regulatory rate review.