Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Earnings before income taxes of $4.6 billion, $4.8 billion and $5.3 billion for years ended 2024, 2023 and 2022, respectively, represent earnings from domestic operations. The breakdown of income tax expense between current and deferred is as follows:

	Years Ended
(Dollars in Millions)	2024		2023 (a)		2022 (a)
Current:
Federal	$	873	$	851	$	928
State	200		184		203
Subtotal Current	$	1,073	$	1,035	$	1,131
Deferred:
Federal	26		110		151
State	(14)		16		(51)
Subtotal Deferred	$	12	$	126	$	100
Total Income Tax Expense	$	1,085	$	1,161	$	1,231

(a) See Note 20, Revision of Prior Period Financial Statements.

The Company recorded a 2024 income tax benefit of $31 million primarily as a result of state legislative changes and a change in the valuation of the state deferred tax liability as a result of filing the 2023 tax returns. In 2023, the Company recorded an income tax benefit of $22 million primarily from a change in the valuation of the state deferred tax liability. In 2022, the Company recorded an income tax benefit of $78 million primarily as a result of state legislative changes and a change in the valuation of the state deferred tax liability.

Income tax expense reconciled to the tax computed at statutory rates is presented in the following table. 

	Years Ended
(Dollars in Millions)	2024				2023 (a)				2022 (a)
Federal Income Taxes	$	957	21.0	%	$	1,014	21.0	%	$	1,122	21.0	%
State Income Taxes	147		3.2	%	158		3.3	%	120		2.2	%
Other	(19)		(0.4)	%	(11)		(0.2)	%	(11)		(0.2)	%
Income Tax Expense/ Rate	$	1,085	23.8	%	$	1,161	24.1	%	$	1,231	23.0	%

(a) See Note 20, Revision of Prior Period Financial Statements.

NOTE 12.  Income Taxes, continued

The primary factors in the change in year-end net deferred income tax liability balances include the annual provision for deferred income tax expense and accumulated other comprehensive income (loss). The significant components of deferred income tax assets and liabilities include:

	2024				2023 (a)
(Dollars in Millions)	Assets		Liabilities		Assets		Liabilities
Other Employee Benefit Plans	$	104	$	—	$	103	$	—
Accelerated Depreciation	—		7,651		—		7,621
Other	464		642		459		640
Total	$	568	$	8,293	$	562	$	8,261
Net Deferred Income Tax Liabilities			$	7,725			$	7,699

(a) See Note 20, Revision of Prior Period Financial Statements.

The Company files a consolidated federal income tax return, which includes its principal domestic subsidiaries. CSX and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. CSX participated in a contemporaneous IRS audit of tax years 2024 and 2023. Federal examinations of original federal income tax returns for all years through 2022 are resolved.

As of December 2024 and 2023, the Company had approximately $20 million and $19 million, respectively, of total unrecognized tax benefits as a result of uncertain tax positions. Net tax benefits of $16 million and $15 million as of December 2024 and 2023, respectively, could favorably impact the effective income tax rate in each year. The Company does not expect that unrecognized tax benefits as of December 2024 for various state and federal income tax matters will significantly change over the next 12 months. The final outcome of these uncertain tax positions is not yet determinable. There were no material changes to the total gross unrecognized tax benefits and prior year audit resolutions of the Company during the year ended December 2024.

CSX’s continuing practice is to recognize net interest and penalties related to income tax matters in income tax expense. Accrued interest and penalties were not material as of December 2024 or 2023. Additionally, expenses from changes to the reserves for interest and penalties were not material in 2024, 2023 or 2022