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Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Taxes [Line Items]  
Income Taxes Income Taxes
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:
Nine Months Ended September 3020242023
CMS Energy, including Consumers
U.S. federal income tax rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1
5.4 1.7 
Renewable energy tax credits(6.3)(6.9)
TCJA excess deferred taxes
(3.8)(3.9)
Deferred tax adjustment2
(1.9)— 
Taxes attributable to noncontrolling interests1.1 0.6 
Other, net(0.2)0.2 
Effective tax rate15.3 %12.7 %
Consumers
U.S. federal income tax rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1
5.0 2.9 
Renewable energy tax credits(4.4)(4.5)
TCJA excess deferred taxes
(3.5)(3.7)
Deferred tax adjustment2
(1.8)— 
Other, net(0.2)(0.1)
Effective tax rate16.1 %15.6 %
1CMS Energy initiated a plan to divest immaterial business activities in a non‑Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction. As a result of these actions, in the first quarter of 2023, CMS Energy reversed a $13 million non‑Michigan reserve, all of which was recognized at Consumers.
2In September 2024, Consumers recognized a $16 million tax benefit resulting from the expiration of the statute of limitations associated with audit points for the 2018 and 2019 tax years.
Renewable Energy Tax Credits: Under the Inflation Reduction Act of 2022, renewable energy tax credits produced after 2022 are transferable to third parties. In April 2024, Consumers sold renewable energy tax credits generated in 2023 and received proceeds of $37 million. In June 2024, Consumers entered into an agreement to sell renewable energy tax credits generated in 2024 for $51 million, subject to adjustment for actual production. These sales are accounted for under ASC 740 with the discount from the sale of the tax credits included as a component of income tax expense. Renewable energy tax credits that have been generated and sold are presented as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets until proceeds from the sale are received. Proceeds from the sale of tax credits are presented as operating activities within the statements of cash flows, consistent with the presentation of cash taxes paid.
Consumers Energy Company  
Income Taxes [Line Items]  
Income Taxes Income Taxes
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:
Nine Months Ended September 3020242023
CMS Energy, including Consumers
U.S. federal income tax rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1
5.4 1.7 
Renewable energy tax credits(6.3)(6.9)
TCJA excess deferred taxes
(3.8)(3.9)
Deferred tax adjustment2
(1.9)— 
Taxes attributable to noncontrolling interests1.1 0.6 
Other, net(0.2)0.2 
Effective tax rate15.3 %12.7 %
Consumers
U.S. federal income tax rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1
5.0 2.9 
Renewable energy tax credits(4.4)(4.5)
TCJA excess deferred taxes
(3.5)(3.7)
Deferred tax adjustment2
(1.8)— 
Other, net(0.2)(0.1)
Effective tax rate16.1 %15.6 %
1CMS Energy initiated a plan to divest immaterial business activities in a non‑Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction. As a result of these actions, in the first quarter of 2023, CMS Energy reversed a $13 million non‑Michigan reserve, all of which was recognized at Consumers.
2In September 2024, Consumers recognized a $16 million tax benefit resulting from the expiration of the statute of limitations associated with audit points for the 2018 and 2019 tax years.
Renewable Energy Tax Credits: Under the Inflation Reduction Act of 2022, renewable energy tax credits produced after 2022 are transferable to third parties. In April 2024, Consumers sold renewable energy tax credits generated in 2023 and received proceeds of $37 million. In June 2024, Consumers entered into an agreement to sell renewable energy tax credits generated in 2024 for $51 million, subject to adjustment for actual production. These sales are accounted for under ASC 740 with the discount from the sale of the tax credits included as a component of income tax expense. Renewable energy tax credits that have been generated and sold are presented as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets until proceeds from the sale are received. Proceeds from the sale of tax credits are presented as operating activities within the statements of cash flows, consistent with the presentation of cash taxes paid.