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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The tax effects of temporary differences that give rise to significant portions of the Company’s Net Deferred Income Tax Assets and Deferred Income Tax Liabilities at December 31, 2023 and 2022 were:
DOLLARS IN MILLIONS20232022
Deferred Income Tax Assets:
Unearned Premium Reserves$54.0 $70.8 
Tax Capitalization of Policy Acquisition Costs46.3 45.9 
Payroll and Employee Benefit Accruals34.8 32.8 
Investments103.4 152.2 
Net Operating Loss and Credit Carryforwards114.6 49.7 
Other32.2 22.6 
Subtotal385.3 374.0 
Valuation Allowance(27.4)— 
Total Deferred Income Tax Assets357.9 374.0 
Deferred Income Tax Liabilities:
Insurance Reserves12.7 24.9 
Deferred Policy Acquisition Costs124.3 133.3 
Life VIF and P&C Customer Relationships3.2 3.7 
Goodwill and Other Intangible Assets Acquired32.6 36.9 
Depreciable Assets19.3 35.7 
Other6.0 10.5 
Total Deferred Income Tax Liabilities198.1 245.0 
Net Deferred Income Tax Assets
$159.8 $129.0 
Due to jurisdictional differences in which the Company operates, the consolidated net deferred tax asset of $159.8 million is reported on the Consolidated Balance Sheets as a total deferred tax asset of $210.4 million and a deferred tax liability of $50.6 million.
The evaluation of the recoverability of the deferred tax asset and the need for a valuation allowance is based on the weight of all available positive and negative evidence. For the year ended December 31, 2023, a valuation of $27.4 million was recorded against those deferred tax assets that were determined not to be more likely than not to be realized based on Management’s assessment, an increase of $27.4 million from the year ended December 31, 2022 when no valuation allowance was recorded.
The expiration of federal net operating loss (“NOL”) and tax credit carryforwards and their related deferred income tax assets at December 31, 2023 is presented below by year of expiration.
DOLLARS IN MILLIONSNOL Carry-forwardsDeferred Tax Asset
Expiring in:
2027$0.8 $0.2 
20284.4 0.9 
20401.4 1.4 
20414.5 4.5 
20426.0 6.0 
2043140.4 29.5 
No Expiration343.3 72.1 
Total All Years$500.8 $114.6 
NOTE 27. INCOME TAXES (Continued)
The carryforwards relate to general business and investment tax credits and federal NOL carryforwards which the Company expects to fully utilize prior to expiration.
There were no Unrecognized Tax Benefits at December 31, 2023, 2022 or 2021. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income Tax Benefit (Expense). There were no liabilities for accrued interest and penalties as of December 31, 2023, 2022 or 2021.
The statute of limitations related to Kemper and its eligible subsidiaries’ consolidated Federal income tax returns is closed for all tax years up to and including 2011 as well as 2018 and 2019. As a result of the Company filing amended federal income tax returns, tax years 2012 and 2013 are under limited examination with respect to carryback adjustments associated with the amended returns. The statute of limitations related to tax years 2015, 2016, 2017 and 2018 has been extended to June 30, 2024. Tax years 2020, 2021 and 2022 are subject to a statute of three years from the extended due dates of October 15, 2021, 2022 and 2023, respectively.
The expiration of the statute of limitations related to the various state income tax returns that Kemper and its subsidiaries file varies by state.
The components of Income Tax Benefit from Operations for the years ended December 31, 2023, 2022 and 2021 were:
DOLLARS IN MILLIONS202320222021
Current Income Tax Benefit (Expense)
$4.0 $(6.2)$122.7 
Deferred Income Tax Benefit
70.8 90.6 2.9 
Income Tax Benefit
$74.8 $84.4 $125.6 
Federal income tax refunds received, net of income taxes paid, were $107.7 million in 2023. Federal income taxes paid, net of income tax refunds received, were $1.1 million, and $34.7 million in 2022 and 2021, respectively.
State income taxes paid, net of income tax refunds received, were $1.0 million in 2023. State income tax refunds received, net of income taxes paid, were $0.4 million in 2022. State income taxes paid, net of income tax refunds received, were $3.3 million in 2021.
No foreign income taxes were paid or refunded in 2023, 2022, or 2021.
A reconciliation of the Statutory Federal Income Tax Benefit and Rate to the Company’s Effective Income Tax Benefit and Rate from Operations for the years ended December 31, 2023, 2022 and 2021 is presented below.
DOLLARS IN MILLIONS202320222021
AmountRateAmountRateAmountRate
Statutory Federal Income Tax Benefit
$72.8 21.0 %$77.9 21.0 %$52.3 21.0 %
Tax-exempt Income and Dividends Received Deduction
4.8 1.4 5.3 1.3 4.6 1.9 
Untaxed Earnings on Company-Owned Life Insurance6.1 1.8 8.0 2.1 5.4 2.2 
Tax credits3.1 0.9 6.5 1.7 66.1 27.0 
Stock-Based Compensation(0.3)(0.1)(1.3)(0.3)0.3 0.1 
Nondeductible Executive Compensation(1.8)(0.5)(1.5)(0.4)(2.7)(1.1)
Goodwill impairment(6.3)(1.8)— — — — 
Expense on Transactions— — (11.5)(3.0)— — 
Effect of foreign operations27.4 7.9 — — — — 
Change in valuation allowance(27.4)(7.9)— — — — 
Other, Net(3.6)(1.1)1.0 0.3 (0.4)(0.2)
Effective Income Tax Benefit
$74.8 21.6 %$84.4 22.7 %$125.6 50.9 %
NOTE 27. INCOME TAXES (Continued)
Comprehensive Income Tax Benefit included in the Consolidated Financial Statements for the years ended December 31, 2023, 2022 and 2021 was:
DOLLARS IN MILLIONS202320222021
Income Tax Benefit (Expense):
Operations$74.8 $84.4 $125.6 
Unrealized (Appreciation) Depreciation on Securities
(50.3)325.5 60.7 
Tax Effects from Postretirement Benefit Plans(12.4)(4.0)1.8 
Tax Effects on changes in Discount Rate for Life Reserves21.2 (289.9)(47.9)
Tax Effects from Cash Flow Hedge— (1.2)(0.1)
Comprehensive Income Tax Benefit
$33.3 $114.8 $140.1