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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income taxes receivable (payable)
UScellular’s current income taxes balances at December 31, 2022 and 2021, were as follows:
December 31,20222021
(Dollars in millions)  
Federal income taxes receivable$4 $123 
Net state income taxes receivable— — 
Income tax expense (benefit)
Income tax expense (benefit) is summarized as follows:
Year Ended December 31,202220212020
(Dollars in millions)   
Current   
Federal$1 $2 $(118)
State3 (23)5 
Deferred
Federal19 49 124 
State14 (8)6 
Total income tax expense (benefit)$37 $20 $17 
Income tax reconciliation
A reconciliation of UScellular’s income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to UScellular’s effective income tax rate is as follows:
Year Ended December 31,202220212020
 AmountRateAmountRateAmountRate
(Dollars in millions)      
Statutory federal income tax expense and rate$15 21.0 %$38 21.0 %$52 21.0 %
State income taxes, net of federal benefit1
14 18.9 (25)(14.1)8 3.4 
Change in federal valuation allowance2
7 9.9 7 3.8 — 0.1 
Loss carryback benefit of CARES Act3
— — — — (49)(19.8)
Nondeductible compensation3 3.6 2 1.3 6 2.6 
Tax credits— (0.6)— (0.2)— (0.1)
Other differences, net(2)(1.3)(2)(0.4)— (0.6)
Total income tax expense (benefit) and rate$37 51.5 %$20 11.4 %$17 6.6 %
1State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes increased in 2022 due primarily to valuation allowance adjustments. State taxes in 2021 are a net benefit due primarily to the reduction of tax accruals resulting from expirations of state statute of limitations for prior tax years.
2Change in federal valuation allowance is due primarily to current year interest expense from partnership investments that carryforward but may not be realized.
3The CARES Act provided a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provided a tax benefit in excess of the current federal statutory rate of 21%.
Deferred income tax assets and liabilities
Significant components of UScellular’s deferred income tax assets and liabilities at December 31, 2022 and 2021, were as follows:
December 31,2022
20211
(Dollars in millions)  
Deferred tax assets  
Net operating loss (NOL) carryforwards$132 $126 
Lease liabilities244 254 
Contract liabilities62 37 
Interest expense carryforwards65 30 
Asset retirement obligation73 64 
Other100 93 
Total deferred tax assets676 604 
Less valuation allowance(115)(83)
Net deferred tax assets561 521 
Deferred tax liabilities
Property, plant and equipment457 446 
Licenses/intangibles382 330 
Partnership investments172 154 
Lease assets224 232 
Other34 33 
Total deferred tax liabilities1,269 1,195 
Net deferred income tax liability$708 $674 
1Certain prior year deferred tax assets and liabilities have been reclassified to align with the current year presentation.
Deferred tax valuation allowance
A summary of UScellular’s deferred tax asset valuation allowance is as follows:
 202220212020
(Dollars in millions)   
Balance at beginning of year$83 $94 $90 
Charged to Income tax expense32 (11)4 
Balance at end of year$115 $83 $94 
Income tax unrecognized benefits summary
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 202220212020
(Dollars in millions)  
   
Unrecognized tax benefits balance at beginning of year$35 $51 $48 
Additions for tax positions of current year5 8 7 
Additions for tax positions of prior years1 — 2 
Reductions for tax positions of prior years— (3)— 
Reductions for settlements of tax positions— (2)— 
Reductions for lapses in statutes of limitations(6)(19)(6)
Unrecognized tax benefits balance at end of year$35 $35 $51