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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

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	2024				2023	2022
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	1,123				$	954		$	902

Income tax expense at statutory rate		236					200			189
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		60					31			51
Renewable energy tax credits		(72)					(58)			(51)
TCJA excess deferred taxes		(43)					(40)			(65)
Deferred tax adjustment2		(16)					—			—
Taxes attributable to noncontrolling interests		12					17			5
Accelerated flow-through of regulatory tax benefits3		—					—			(39)

Other, net		(1)					(3)			3
Income tax expense		$	176				$	147		$	93
Effective tax rate		15.7		%			15.4		%	10.3		%
Consumers
Income from continuing operations before income taxes		$	1,209				$	1,028		$	1,085

Income tax expense at statutory rate		254					216			228
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		59					36			59
Renewable energy tax credits		(54)					(46)			(46)
TCJA excess deferred taxes		(43)					(40)			(65)
Deferred tax adjustment2		(16)					—			—
Accelerated flow-through of regulatory tax benefits3		—					—			(39)

Other, net		—					(5)			3
Income tax expense		$	200				$	161		$	140
Effective tax rate		16.5		%			15.7		%	12.9		%

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, during 2023, CMS Energy reversed a $13 million non‑Michigan reserve, all of which was recognized at Consumers.

2During 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.

3In 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 were fully amortized in 2022.

Summary of 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	2024			2023			2022
CMS Energy, including Consumers
Current income taxes
Federal		$	34		$	5		$	6
State and local		—			1			—
		$	34		$	6		$	6
Deferred income taxes
Federal		70			107			4
State and local		76			38			65
		$	146		$	145		$	69
Deferred income tax credit		(4)			(4)			18
Tax expense		$	176		$	147		$	93
Consumers
Current income taxes
Federal		$	78		$	3		$	(2)
State and local		7			2			8
		$	85		$	5		$	6
Deferred income taxes
Federal		51			117			50
State and local		68			43			66
		$	119		$	160		$	116
Deferred income tax credit		(4)			(4)			18
Tax expense		$	200		$	161		$	140

Summary of Principal Components of Deferred Income Tax Assets and Liabilities

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


In Millions
December 31	2024			2023
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	258		$	428
Net regulatory tax liability		307			305
Reserves and accruals		27			28
Total deferred income tax assets		$	592		$	761
Valuation allowance		(1)			(2)
Total deferred income tax assets, net of valuation allowance		$	591		$	759
Deferred income tax liabilities
Plant, property, and equipment		$	(2,682)		$	(2,520)
Employee benefits		(507)			(473)
Gas inventory		(38)			(66)
Securitized costs		(167)			(194)
Other		(122)			(121)
Total deferred income tax liabilities		$	(3,516)		$	(3,374)
Total net deferred income tax liabilities		$	(2,925)		$	(2,615)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	307		$	305
Tax loss and credit carryforwards		37			175
Reserves and accruals		24			27


Total deferred income tax assets		$	368		$	507
Deferred income tax liabilities
Plant, property, and equipment		$	(2,658)		$	(2,498)
Employee benefits		(489)			(459)
Gas inventory		(38)			(66)
Securitized costs		(167)			(194)
Other		(69)			(79)
Total deferred income tax liabilities		$	(3,421)		$	(3,296)
Total net deferred income tax liabilities		$	(3,053)		$	(2,789)

Summary of Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2024:


In Millions
	Tax Attribute	Expiration
CMS Energy, including Consumers

Michigan net operating loss carryforwards		$	38	2030 – 2033
Arkansas net operating loss carryforwards		2		2033 - 2034
Local net operating loss carryforwards		2		2025 – 2040
General business credits1		216		2038 – 2044



Total tax attributes		$	258
Consumers

Michigan net operating loss carryforwards		$	29	2030 – 2033

General business credits1		8		2038 – 2044


Total tax attributes		$	37

1General business credits comprise research and development tax credits and renewable energy tax credits that are not expected to be transferred to third parties.

Schedule of Reconciliation of 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	2024			2023			2022
CMS Energy, including Consumers
Balance at beginning of period		$	26		$	28		$	27
Additions for current-year tax positions		1			1			1
Additions for prior-year tax positions		2			—			1
Reductions for prior-year tax positions		—			—			(1)
Reductions for lapse of statute of limitations		(5)			(3)			—

Balance at end of period		$	24		$	26		$	28
Consumers
Balance at beginning of period		$	36		$	36		$	34
Additions for current-year tax positions		6			1			3
Additions for prior-year tax positions		1			2			1
Reductions for prior-year tax positions		—			—			(2)
Reductions for lapse of statute of limitations		(11)			(3)			—

Balance at end of period		$	32		$	36		$	36

Consumers Energy Company

Income Taxes [Line Items]