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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of income tax expense were as follows for the years ended December 31:
Millions | 2024 | 2023 | 2022
Current tax expense: |  |  |
Federal | $ | 1,649 |  | $ | 1,417 |  | $ | 1,465 |
State | 359 |  | 314 |  | 340 |
Foreign | 11 |  | 6 |  | 7 |
Total current tax expense | 2,019 |  | 1,737 |  | 1,812 |
Deferred and other tax expense/(benefit): |  |  |
Federal | 47 |  | 219 |  | 320 |
State [a] | (24) |  | (104) |  | (59) |
Foreign | 5 |  | 2 |  | 1 |
Total deferred and other tax expense | 28 |  | 117 |  | 262 |
Total income tax expense | $ | 2,047 |  | $ | 1,854 |  | $ | 2,074 |
[a]In 2024, Louisiana and Arkansas enacted corporate income tax legislation that resulted in a $34 million reduction of our deferred tax expense. In 2023, Nebraska, Iowa, Kansas, and Arkansas enacted corporate income tax legislation that resulted in a $114 million reduction of our deferred tax expense. In 2022, Nebraska, Iowa, Arkansas, and Idaho enacted corporate income tax legislation that resulted in a $95 million reduction of our deferred tax expense. For the years ended December 31, reconciliations between statutory and effective tax rates are as follows:
Tax Rate Percentages | 2024 | 2023 | 2022
Federal statutory tax rate | 21.0 | % | 21.0 | % | 21.0 | %
State statutory rates, net of federal benefits | 3.2 |  | 3.4 |  | 3.6 |
Dividends received deduction | (0.5) |  | (0.6) |  | (0.5) |
Excess tax benefits from equity compensation plans | (0.2) |  | (0.1) |  | (0.2) |
Deferred tax adjustments | - |  | (1.2) |  | (1.0) |
Other [a] | (0.2) |  | - |  | - |
Effective tax rate | 23.3 | % | 22.5 | % | 22.9 | %
[a]The effective income tax rate for 2024 includes tax benefits from purchases of federal tax credits. Deferred income tax assets/(liabilities) were comprised of the following at December 31:
Millions | 2024 | 2023
Deferred income tax liabilities: |  |
Property | $ | (13,020) |  | $ | (12,987) |
Operating lease assets | (314) |  | (404) |
Other | (581) |  | (556) |
Total deferred income tax liabilities | (13,915) |  | (13,947) |
Deferred income tax assets: |  |
Operating lease liabilities | 308 |  | 394 |
Accrued casualty costs | 172 |  | 168 |
Accrued wages | 51 |  | 50 |
Stock compensation | 28 |  | 26 |
Other | 205 |  | 186 |
Total deferred income tax assets | 764 |  | 824 |
Net deferred income tax liability | $ | (13,151) |  | $ | (13,123) |
In 2024 and 2023, there were no valuation allowances against deferred tax assets. A reconciliation of changes in unrecognized tax benefits liabilities/(assets) from the beginning to the end of the reporting period is as follows:
Millions | 2024 | 2023 | 2022
Unrecognized tax benefits at January 1 | $ | 30 |  | $ | 34 |  | $ | 38 |
Refunds from/(payments to) and settlements with taxing authorities | 7 |  | - |  | - |
Decreases for positions taken in prior years | (6) |  | (1) |  | (4) |
Increases/(decreases) for interest and penalties | 1 |  | - |  | - |
Lapse of statutes of limitations | - |  | (4) |  | (3) |
Increases for positions taken in current year | - |  | 1 |  | 3 |
Unrecognized tax benefits at December 31 | $ | 32 |  | $ | 30 |  | $ | 34 |
We recognize interest and penalties as part of income tax expense. Total accrued liabilities/(receivables) for interest and penalties were $4 million and ($4) million at December 31, 2024 and 2023, respectively. Total interest and penalties recognized as part of income tax expense/(benefit) were $1 million for 2024, ($1) million for 2023, and ($2) million for 2022. Several state tax authorities are examining our state income tax returns for years 2018 through 2023. We do not expect our unrecognized tax benefits to change significantly in the next 12 months. The portion of our unrecognized tax benefits that relates to permanent changes in tax and interest would reduce our effective tax rate, if recognized. The remaining unrecognized tax benefits relate to tax positions for which only the timing of the benefit is uncertain. The unrecognized tax benefits that would reduce our effective tax rate are $32 million for 2024, $30 million for 2023, and $31 million for 2022.

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