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Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
4. Income Taxes

The components of “Income Before Income Taxes” are as follows:
 Year Ended December 31,
 202420232022
(In millions)
U.S.$3,402 $3,192 $3,318 
Foreign5 9 17 
Total Income Before Income Taxes$3,407 $3,201 $3,335 

Components of the income tax provision applicable for federal, foreign and state taxes are as follows:
 Year Ended December 31,
 202420232022
(In millions)
Current tax expense   
Federal$11 $— $— 
State26 5 14 
Foreign3 — 4 
Total40 5 18 
Deferred tax expense    
Federal602 619 642 
State45 91 50 
Total647 710 692 
Total tax provision$687 $715 $710 

The difference between the statutory federal income tax rate and our effective income tax rate is summarized as follows:
 Year Ended December 31,
 202420232022
(In millions, except percentages)
Federal income tax$716 21.0 %$672 21.0 %$700 21.0 %
Increase (decrease) as a result of:      
State income tax, net of federal benefit71 2.1 %64 2.0 %69 2.0 %
Dividend received deduction(34)(1.0)%(34)(1.1)%(36)(1.1)%
General business credit(a)
(42)(1.2)%(1)— %— — %
Other(24)(0.7)%14 0.4 %(23)(0.7)%
Total$687 20.2 %$715 22.3 %$710 21.2 %
(a)Recognition of investment tax credits generated by biogas projects.
Deferred tax assets and liabilities result from the following:
 December 31,
 20242023
(In millions)
Deferred tax assets  
Employee benefits$81 $114 
Net operating loss carryforwards1,416 2,024 
Tax credit carryforwards312 300 
Interest expense limitation372 266 
Other179 181 
Valuation allowances(64)(77)
Total deferred tax assets2,296 2,808 
Deferred tax liabilities
Property, plant and equipment217 215 
Investments(a)
4,124 3,951 
Other25 30 
Total deferred tax liabilities4,366 4,196 
Net deferred tax liability$(2,070)$(1,388)
(a)Amounts as of December 31, 2024 and 2023 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, 2024 is as follows:
Year Ended
December 31, 2024
(In millions)
Balance at beginning of period$77 
Addition for state NOL4 
State rate changes(10)
Currency fluctuation(7)
Balance at end of period$64 

The following table provides details related to our deferred tax assets and valuation allowances as of December 31, 2024:
Unused AmountDeferred Tax AssetValuation AllowanceExpiration Period
(In millions)
Net Operating Loss
U.S. federal net operating loss$5,707 $1,198 $— Indefinite
State losses4,560 194 (40)2024 - 2044
Foreign losses70 24 (24)Indefinite
Tax Credits
General business credits312 312 — 2036 - 2044

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,
202420232022
(In millions)
Balance at beginning of period$18 $23 $21 
Reductions based on statute expirations(3)(5)(5)
Audit settlement— (1)— 
Additions to state reserves for prior years4 1 7 
Balance at end of period$19 $18 $23 
Amounts which, if recognized, would affect the effective tax rate$19 

In addition, we believe it is reasonably possible that our liability for unrecognized tax benefits will increase by $3 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.2020 - 2024
Various states2012 - 2024
Foreign2020 - 2024