INCOME TAXES (Notes)

12 Months Ended

Dec. 31, 2019

The following table sets forth our provision for income taxes for the periods indicated:



	Years Ended December 31,
	2019			2018		2017
	(Thousands of dollars)
Current tax expense (benefit)
Federal	$	(1,278	)	$	260	$	295
State	963			1,633		1,670
Total current tax expense (benefit)	(315		)	1,893		1,965
Deferred tax expense
Federal	327,806			319,551		376,728
State	44,923			41,459		68,589
Total deferred tax expense	372,729			361,010		445,317
Total provision for income taxes	$	372,414		$	362,903	$	447,282

The following table is a reconciliation of our income tax provision for the periods indicated:



	Years Ended December 31,
	2019			2018			2017
	(Thousands of dollars)
Income before income taxes	$	1,650,991		$	1,517,935		$	1,040,801
Less: Net income attributable to noncontrolling interests	—			3,329			205,678
Net income attributable to ONEOK before income taxes	1,650,991			1,514,606			835,123
Federal statutory income tax rate	21.0		%	21.0		%	35.0		%
Provision for federal income taxes	346,708			318,067			292,293
State income taxes, net of federal benefit	34,545			38,668			16,197
Deferred tax rate change, inclusive of valuation allowance	11,340			5,552			141,283
Excess tax benefits from share-based compensation	(20,983		)	(4,644		)	—
Other, net	804			5,260			(2,491		)
Income tax provision	$	372,414		$	362,903		$	447,282

The following table sets forth the tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities for the periods indicated:



	December 31, 2019			December 31, 2018
Deferred tax assets	(Thousands of dollars)
Employee benefits and other accrued liabilities	$	99,510		$	91,587
Federal net operating loss	858,030			420,318
State net operating loss and benefits	171,779			108,004
Derivative instruments	83,710			22,108
Other	12,769			13,378
Total deferred tax assets	1,225,798			655,395
Valuation allowance for state net operating loss and tax credits
Carryforward expected to expire prior to utilization	(94,794		)	(73,820		)
Net deferred tax assets	1,131,004			581,575
Deferred tax liabilities
Excess of tax over book depreciation	84,631			73,113
Investment in partnerships (a)	1,582,436			728,193
Total deferred tax liabilities	1,667,067			801,306
Net deferred tax assets (liabilities)	$	(536,063	)	$	(219,731	)

(a) Due primarily to excess of tax over book depreciation.

In December 2017, the Tax Cuts and Jobs Act was signed into law. The Tax Cuts and Jobs Act made extensive changes to the U.S. tax laws and included provisions that, beginning in 2018, reduced the U.S. corporate tax rate to 21% from 35%, increased expensing for capital investment, limited the interest deduction, and limited the use of net operating losses to offset future taxable income. We revalued our deferred tax assets and liabilities as required at enactment. At that time, our net deferred tax assets represented expected corporate tax benefits in the future. The reduction in the federal corporate tax rate reduced these benefits, which resulted in a one-time noncash charge to net income through income tax expense of $141.3 million, inclusive of the valuation allowance described below, recorded in the fourth quarter 2017.

Tax benefits related to certain state net operating loss, tax credit carryforwards and charitable contribution carryforwards will begin expiring in 2020. Due to the Tax Cuts and Jobs Act and the impact of increased expensing for capital investment, we believe that it is more likely than not that the tax benefits of certain carryforwards will not be utilized prior to their expirations; therefore, we recorded a valuation allowance of $11.3 million, $5.6 million and $54.1 million through net income related to these tax benefits in 2019, 2018 and 2017, respectively.