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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Income Tax Summary
DTE Energy files a consolidated federal income tax return. DTE Electric is a part of the consolidated federal income tax return of DTE Energy. DTE Energy and its subsidiaries file consolidated and/or separate company income tax returns in various states and localities, including a consolidated return in the State of Michigan. DTE Electric is part of the Michigan consolidated income tax return of DTE Energy. The federal, state and local income tax expense for DTE Electric is determined on an individual company basis with no allocation of tax expenses or benefits from other affiliates of DTE Energy. DTE Electric had federal income tax receivables with DTE Energy of $1 million and $5 million at December 31, 2025 and 2024, respectively. Income tax receivables with DTE Energy are included in Accounts receivable – Affiliates on the DTE Electric Consolidated Statements of Financial Position.
The Registrants' total Income Tax Expense varied from the statutory federal income tax rate for the following reasons:
Year Ended December 31,
202520242023
(In millions)
DTE EnergyAmountPercentageAmountPercentageAmountPercentage
Income tax expense at U.S. Federal Statutory Tax Rate$326 21.0 %$288 21.0 %$329 21.0 %
Tax Credits
Production tax credits(161)(10.4)%(174)(12.7)%(91)(5.8)%
Investment tax credits(94)(6.1)%(128)(9.3)%(44)(2.8)%
Other(5)(0.3)%(4)(0.3)%(5)(0.3)%
Other Adjustments
TCJA regulatory liability amortization(65)(4.2)%(66)(4.8)%(63)(4.0)%
Other(4)(0.1)%4 0.2 %— — %
Nontaxable or Nondeductible Items
AFUDC equity(20)(1.3)%(17)(1.2)%(7)(0.5)%
Other6 0.5 %(3)(0.3)%(4)(0.2)%
Changes in Tax Laws or Rates Enacted in the Current Period16 1.0 %— — %— — %
Changes in Valuation Allowances 7 0.4 %6 0.5 %— — %
Changes in Prior Year Unrecognized Tax Benefits— — %— — %(12)(0.8)%
Foreign Tax Effects
Canada1 — %1 0.1 %— — %
State and Local Income Taxes, Net of Federal Effect (a)
$81 5.2 %$59 4.3 %$66 4.2 %
Income Tax Expense (Benefit) at Effective Tax Rate$88 5.7 %$(34)(2.5)%$169 10.8 %
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(a)State taxes in Michigan made up the majority (greater than 50 percent) of the tax effect in this category for all years presented. State and local income taxes in 2025 includes $14 million expense due to an Illinois tax law change.
Year Ended December 31,
202520242023
(In millions)
DTE ElectricAmountPercentageAmountPercentageAmountPercentage
Income tax expense at U.S. Federal Statutory Tax Rate$257 21.0 %$218 21.0 %$179 21.0 %
Tax Credits
Investment tax credits(95)(7.7)%(70)(6.7)%(1)(0.1)%
Production tax credits(77)(6.3)%(167)(16.0)%(79)(9.3)%
Other(4)(0.4)%(4)(0.4)%(4)(0.5)%
Other Adjustments
TCJA regulatory liability amortization(53)(4.4)%(55)(5.3)%(53)(6.2)%
Other(1)(0.1)%2 0.2 %— — %
Nontaxable or Nondeductible Items
AFUDC equity(20)(1.6)%(16)(1.6)%(7)(0.8)%
Other(2)(0.1)%(2)(0.2)%(2)(0.2)%
Changes in Prior Year Unrecognized Tax Benefits— — %— — %(7)(0.8)%
Changes in Valuation Allowances — — %5 0.4 %— — %
State and Local Income Taxes, Net of Federal Effect (a)
$66 5.4 %$57 5.5 %$52 6.1 %
Income Tax Expense (Benefit) at Effective Tax Rate$71 5.8 %$(32)(3.1)%$78 9.2 %
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(a)State taxes in Michigan made up the majority (greater than 50 percent) of the tax effect in this category for all years presented.
Components of the Registrants' Income Taxes Paid were as follows:
Year Ended December 31,
202520242023
DTE Energy(In millions)
U.S. Federal(a)
$(266)$(230)$2 
U.S. State and Local
Michigan(5)(5)(10)
Pennsylvania1 2 2 
Other1 — 1 
(3)(3)(7)
Foreign2 3 — 
Total$(267)$(230)$(5)
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(a)Includes proceeds on sale of transferrable income tax credits, net of discount, in 2025 and 2024.
Year Ended December 31,
202520242023
DTE Electric(In millions)
U.S. Federal(a)
$(273)$(231)$9 
U.S. State and Local
Michigan$— $— $6 
Total$(273)$(231)$15 
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(a)Includes proceeds on sale of transferrable income tax credits, net of discount, in 2025 and 2024.
Components of the Registrants' Income Tax Expense were as follows:
Year Ended December 31,
202520242023
DTE Energy(In millions)
Income (loss) from continuing operations before income tax expense (benefit)
US$1,543 $1,357 $1,559 
Foreign7 13 7 
Total$1,550 $1,370 $1,566 
Income tax expense (benefit) from continuing operations
Current tax expense (benefit)
US federal$(269)$(229)$(10)
US state and local(3)(2)(2)
Foreign2 3 — 
Total current tax expense (benefit)$(270)$(228)$(12)
Deferred tax expense (benefit)
US federal$253 $116 $103 
US state and local105 77 76 
Foreign— 1 2 
Total deferred tax expense (benefit)$358 $194 $181 
Total tax expense (benefit)
US federal$(16)$(113)$93 
US state and local102 75 74 
Foreign2 4 2 
Total tax expense (benefit)$88 $(34)$169 
Year Ended December 31,
202520242023
DTE Electric(In millions)
Income (loss) from continuing operations before income tax expense (benefit)
US$1,223 $1,040 $850 
Total$1,223 $1,040 $850 
Income tax expense (benefit) from continuing operations
Current tax expense (benefit)
US federal$(268)$(228)$1 
US state and local— — (5)
Total current tax expense (benefit)$(268)$(228)$(4)
Deferred tax expense (benefit)
US federal$256 $124 $19 
US state and local83 72 63 
Total deferred tax expense (benefit)$339 $196 $82 
Total tax expense (benefit)
US federal$(12)$(104)$20 
US state and local83 72 58 
Total tax expense (benefit)$71 $(32)$78 
Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts in the Registrants' Consolidated Financial Statements.
The Registrants' deferred tax assets (liabilities) were comprised of the following at December 31:
DTE EnergyDTE Electric
2025202420252024
(In millions)
Property, plant, and equipment$(3,952)$(3,695)$(2,947)$(2,788)
Regulatory assets and liabilities(1,412)(1,272)(1,636)(1,492)
Tax credit carryforwards1,619 1,604 512 583 
Pension and benefits3 55 2 62 
Federal net operating loss carryforward180 190 24 30 
State and local net operating loss carryforwards51 68 27 42 
Investments in equity method investees(25)(28)(1)(1)
Other182 145 207 176 
(3,354)(2,933)(3,812)(3,388)
Less: Valuation allowance(46)(25)— (5)
Long-term deferred income tax liabilities$(3,400)$(2,958)$(3,812)$(3,393)
Deferred income tax assets$2,575 $2,508 $1,188 $1,209 
Deferred income tax liabilities(5,975)(5,466)(5,000)(4,602)
$(3,400)$(2,958)$(3,812)$(3,393)
Tax credit carryforwards for DTE Energy include $1.6 billion of general business credits that expire from 2034 through 2047. No valuation allowance is required for the tax credit carryforwards deferred tax asset.
DTE Energy has a pre-tax federal net operating loss carryforward of $856 million as of December 31, 2025 which can be carried forward indefinitely. No valuation allowance is required for the federal net operating loss deferred tax asset.
DTE Energy has state and local deferred tax assets related to net operating loss carryforwards of $51 million and $68 million at December 31, 2025 and 2024, respectively. Most of the state and local net operating loss carryforwards expire from 2026 through 2045 with the remainder being carried forward indefinitely.
DTE Energy has recorded valuation allowances of $46 million and $25 million at December 31, 2025 and 2024, respectively. The valuation allowances include $15 million and $16 million related to the state net operating loss carryforwards noted above and $30 million and $3 million related to charitable contribution carryforwards as of the respective periods ended.
Tax credit carryforwards for DTE Electric include $512 million of general business credits that expire from 2036 through 2047. No valuation allowance is required for the tax credit carryforwards deferred tax asset.
DTE Electric has a pre-tax federal net operating loss carryforward of $112 million as of December 31, 2025 which can be carried forward indefinitely. No valuation allowance is required for the federal net operating loss deferred tax asset.
DTE Electric has $27 million and $42 million in state and local deferred tax assets related to net operating loss carryforwards at December 31, 2025 and 2024, respectively, which will expire from 2030 through 2045. No valuation allowance is required for the state and local net operating loss deferred tax assets.
In assessing the realizability of deferred tax assets, DTE Energy considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
The above tables exclude unamortized ITCs that are shown separately on the Registrants' Consolidated Statements of Financial Position. DTE Energy's policy election is to follow the flow-through method of accounting for ITCs earned from its non-utility businesses and the deferral method of accounting for its regulated utilities due to different economic profiles of the various entities. The flow-through method used by the non-utility businesses recognizes ITCs in earnings when the related assets are placed in service. The ITCs generated by the regulated utilities are deferred and amortized to earnings over the average life of the related property. ITCs generated and sold by the regulated utilities are offset with a regulatory asset to give the benefit to customers over a period shorter than the book life, as approved by the MPSC. Refer to Note 9 to the Consolidated Financial Statements, "Regulatory Matters" for the regulatory asset balance at December 31, 2025.
The benefit from wind PTCs and solar ITCs generated by DTE Electric are provided to customers through the regulatory construct of the renewable energy program and nuclear PTCs generated by DTE Electric are provided to customers through the regulatory construct of the PSCR mechanism.
Beginning in 2024, DTE Electric sold certain PTCs and ITCs detailed below. Tax credit sales are subject to standard indemnifications up to the cash received. Payments under these indemnifications are considered remote. The following table details the Registrants' tax credit sales, net of discount, by year of sale:
Year Ended December 31,
202520242023
(In millions)
Cash received for tax credit sales$268 $231 $— 
On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was enacted into law. As a result of the OBBB, DTE Energy recorded a valuation allowance of $16 million related to their charitable contribution carryforward in the third quarter.
Uncertain Tax Positions
There were no unrecognized tax benefits at the Registrants for the years ended December 31, 2025 or 2024.
The Registrants recognize interest and penalties pertaining to income taxes in Interest expense and Other expenses, respectively, on the Consolidated Statements of Operations. DTE Energy did not recognize any interest expense related to income taxes in 2025 and 2024 and recognized a nominal amount of interest expense related to income taxes in 2023. DTE Electric did not recognize any interest expense related to income taxes in 2025 and 2024 and recognized a nominal amount of interest expense in 2023. There was no accrued interest or penalties pertaining to income taxes for the Registrants at December 31, 2025, 2024, and 2023.
In 2025, DTE Energy, including DTE Electric, settled a federal tax audit for the 2023 tax year. DTE Energy's federal income tax returns for 2024 and subsequent years remain subject to examination by the IRS. DTE Energy's Michigan Corporate Income Tax returns for the year 2021 and subsequent years remain subject to examination by the State of Michigan. DTE Energy also files tax returns in numerous state and local jurisdictions with varying statutes of limitation.