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Income Taxes | 9 Months Ended
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Sep. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7 to the consolidated financial statements included in Xcel Energy’s Annual Report on Form 10-K for the year ended Dec. 31, 2019, represents, in all material respects, the current status of other income tax matters except to the extent noted below, and are incorporated herein by reference. The following table reconciles the difference between the statutory rate and the ETR:
|  | Three Months Ended Sept. 30 |  | Nine Months Ended Sept. 30
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State tax (net of federal tax effect) |  | 5.0 |  |  | 5.0 |  |  | 5.1 |  |  | 5.0 |
Decreases: |  |  |  |  |  |  |  |
Wind PTCs |  | (8.0) |  |  | (6.1) |  |  | (13.2) |  |  | (8.1) |
Plant regulatory differences (a) |  | (7.2) |  |  | (5.6) |  |  | (7.4) |  |  | (5.5) |
NOL carryback |  | (1.9) |  |  | — |  |  | (1.0) |  |  | — |
Other tax credits and NOL allowances (net) |  | (1.0) |  |  | (1.7) |  |  | (1.2) |  |  | (1.8) |
Other (net) |  | (1.2) |  |  | (0.6) |  |  | (1.3) |  |  | (0.5) |
Effective income tax rate |  | 6.7 | % |  | 12.0 | % |  | 2.0 | % |  | 10.1 | %
(a) Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions. Federal Tax Loss Carryback Claims — In 2020, Xcel Energy identified certain expenses related to tax years 2009-2011 that qualify for an extended carryback claim. As a result, a tax benefit of approximately $13 million was recognized in 2020. Federal Audits — Statute of limitations applicable to Xcel Energy’s consolidated federal income tax returns expire as follows:
Tax Years |  | Expiration
2014 — 2016 |  | July 2021
Additionally, the statute of limitations related to the federal tax loss carryback claim referenced above has been extended. Xcel Energy has recognized its best estimate of income tax expense that will result from a final resolution of this issue; however, the outcome and timing of a resolution is unknown. In 2017, the IRS concluded the audit of tax years 2012 and 2013 and proposed an adjustment that would impact Xcel Energy’s NOL and ETR. Xcel Energy filed a protest with the IRS. In April 2020, Xcel Energy and Office of Appeals reached an agreement and no material adjustments were required. In 2018, the IRS began an audit of tax years 2014 - 2016. In July 2020, Xcel Energy and the IRS reached an agreement and the related benefit was recognized. State Audits — Xcel Energy files consolidated state tax returns based on income in its major operating jurisdictions and various other state income-based tax returns. As of Sept. 30, 2020, Xcel Energy’s earliest open tax years (subject to examination by state taxing authorities in its major operating jurisdictions) were as follows:
State |  | Year
Colorado |  | 2009
Minnesota |  | 2009
Texas |  | 2011
Wisconsin |  | 2014
•In 2018, Wisconsin began an audit of tax years 2014 - 2016. As of Sept. 30, 2020, no material adjustments have been proposed. •In July 2020, Minnesota began a review of the 2015-2018 Research and Experimentation Credits. As of Sept. 30, 2020, no material adjustments have been proposed. •No other state income tax audits were in progress as of Sept. 30, 2020. Unrecognized Benefits — The unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the annual ETR. In addition, the unrecognized tax benefit balance includes temporary tax positions for which ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. A change in the period of deductibility would not affect the ETR but would accelerate the payment to the taxing authority to an earlier period. Unrecognized tax benefits — permanent vs. temporary:
(Millions of Dollars) |  | Sept. 30, 2020 |  | Dec. 31, 2019
Unrecognized tax benefit — Permanent tax positions |  | $ | 36 |  |  | $ | 35 |
Unrecognized tax benefit — Temporary tax positions |  | 5 |  |  | 9 |
Total unrecognized tax benefit |  | $ | 41 |  |  | $ | 44 |
Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:
(Millions of Dollars) |  | Sept. 30, 2020 |  | Dec. 31, 2019
NOL and tax credit carryforwards |  | $ | (28) |  |  | $ | (40) |
Net deferred tax liability associated with the unrecognized tax benefit amounts and related NOLs and tax credit carryforwards were $23 million at Sept. 30, 2020 and $29 million at Dec. 31, 2019. As the IRS audit resumes and state audits progress, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $19 million in the next 12 months. Payables for interest related to unrecognized tax benefits were not material and no amounts were accrued for penalties related to unrecognized tax benefits as of Sept. 30, 2020 or Dec. 31, 2019.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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