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Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
5. Income Taxes

The components of “Income Before Income Taxes” are as follows:
 Year Ended December 31,
 202320222021
(In millions)
U.S.$3,192 $3,318 $2,217 
Foreign9 17 2 
Total Income Before Income Taxes$3,201 $3,335 $2,219 

Components of the income tax provision applicable for federal, foreign and state taxes are as follows:
 Year Ended December 31,
 202320222021
(In millions)
Current tax expense   
State$5 $14 $11 
Foreign— 4 3 
Total5 18 14 
Deferred tax expense    
Federal619 642 334 
State91 50 21 
Total710 692 355 
Total tax provision$715 $710 $369 
The difference between the statutory federal income tax rate and our effective income tax rate is summarized as follows:
 Year Ended December 31,
 202320222021
(In millions, except percentages)
Federal income tax$672 21.0 %$700 21.0 %$466 21.0 %
Increase (decrease) as a result of:      
State income tax, net of federal benefit64 2.0 %69 2.0 %50 2.2 %
Dividend received deduction(34)(1.1)%(36)(1.1)%(46)(2.1)%
Release of valuation allowance— — %— — %(38)(1.7)%
General business credit(1)— %— — %(36)(1.6)%
Other14 0.4 %(23)(0.7)%(27)(1.2)%
Total$715 22.3 %$710 21.2 %$369 16.6 %

Deferred tax assets and liabilities result from the following:
 December 31,
 20232022
(In millions)
Deferred tax assets  
Employee benefits$114 $116 
Net operating loss carryforwards2,024 2,007 
Tax credit carryforwards300 303 
Interest expense limitation266 82 
Other181 192 
Valuation allowances(77)(79)
Total deferred tax assets2,808 2,621 
Deferred tax liabilities
Property, plant and equipment215 163 
Investments(a)
3,951 3,056 
Other30 25 
Total deferred tax liabilities4,196 3,244 
Net deferred tax liability$(1,388)$(623)
(a)Amounts as of December 31, 2023 and 2022 are primarily associated with KMI’s investment in KMP.

Deferred Tax Assets and Valuation Allowances

A reconciliation of our valuation allowances for the year ended December 31, 2023 is as follows:
Year Ended
December 31, 2023
(In millions)
Balance at beginning of period$79 
Statute expirations for state NOL and foreign tax credits
(5)
Currency fluctuation3 
Balance at end of period$77 
The following table provides details related to our deferred tax assets and valuation allowances as of December 31, 2023:
Unused AmountDeferred Tax AssetValuation AllowanceExpiration Period
(In millions)
Net Operating Loss
U.S. federal net operating loss$6,565 $1,379 $— Indefinite
U.S. federal net operating loss1,716 360 — 2035 - 2037
State losses5,293 254 (46)2024 - 2043
Foreign losses90 31 (31)Indefinite
Tax Credits
General business credits300 300 — 2036 - 2042

Use of a portion of our U.S. federal carryforwards is subject to the limitations provided under Sections 382 and 383 of the Internal Revenue Code as well as the separate return limitation rules of Internal Revenue Service regulations. If certain substantial changes in our ownership occur, there would be an annual limitation on the amount of carryforwards that could be utilized.

Unrecognized Tax Benefits: We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based not only on the technical merits of the tax position based on tax law, but also the past administrative practices and precedents of the taxing authority.  The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

A reconciliation of our gross unrecognized tax benefit excluding interest and penalties is as follows:
Year Ended December 31,
202320222021
(In millions)
Balance at beginning of period$23 $21 $18 
Reductions based on statute expirations(5)(5)— 
Audit settlement(1)— — 
Additions to state reserves for prior years1 7 3 
Balance at end of period$18 $23 $21 
Amounts which, if recognized, would affect the effective tax rate$18 

In addition, we believe it is reasonably possible that our liability for unrecognized tax benefits will increase by $4 million during the next year, primarily due to additions for state filing positions taken in prior years, offset by releases from statute expirations.

The following table summarizes information of our open tax years:
JurisdictionOpen Tax Year
U.S.2019 - 2023
Various states2012 - 2023
Foreign2008 - 2023