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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income tax provision from continuing operations | The income tax provision from continuing operations consisted of the following amounts:
| Year Ended December 31, |  |  |  |
(In millions, except effective income tax rate) | 2019 |  | 2018 |  | 2017
Current |  |  |  |  |
State | $ | 2 |  |  | $ | 6 |  |  | $ | 19 |
Foreign | 4 |  |  | — |  |  | — |
Total — current | 6 |  |  | 6 |  |  | 19 |
Deferred |  |  |  |  |
U.S. Federal | (3,000) |  |  | (16) |  |  | (60) |
State | (340) |  |  | 16 |  |  | (5) |
Foreign | — |  |  | 1 |  |  | 2 |
Total — deferred | (3,340) |  |  | 1 |  |  | (63) |
Total income tax (benefit)/expense | $ | (3,334) |  |  | $ | 7 |  |  | $ | (44) |
Effective income tax rate | (424.2) | % |  | 1.5 | % |  | 3.2 | %
Domestic and foreign components of income/(loss) before income tax (benefit)/expense | The following represented the domestic and foreign components of income/(loss) from continuing operations before income taxes:
| Year Ended December 31, |  |  |  |
(In millions) | 2019 |  | 2018 |  | 2017
U.S. | $ | 771 |  |  | $ | 468 |  |  | $ | (1,406) |
Foreign | 15 |  |  | (1) |  |  | 17 |
Total | $ | 786 |  |  | $ | 467 |  |  | $ | (1,389) |
Reconciliation of the U.S. federal statutory rate to NRG's effective rate | Reconciliations of the U.S. federal statutory tax rate to NRG's effective tax rate were as follows:
| Year Ended December 31, |  |  |  |
(In millions, except effective income tax rate) | 2019 |  | 2018 |  | 2017
Income/(loss) from continuing operations before income taxes | $ | 786 |  |  | $ | 467 |  |  | $ | (1,389) |
Tax at federal statutory tax rate | 165 |  |  | 98 |  |  | (486) |
State taxes | 13 |  |  | 18 |  |  | 19 |
Foreign operations | — |  |  | — |  |  | 2 |
Permanent differences | (9) |  |  | 7 |  |  | — |
Valuation allowance - current period activities | (3,492) |  |  | (106) |  |  | 455 |
Book goodwill impairment | — |  |  | — |  |  | 30 |
Deferred impact of state tax rate changes | 12 |  |  | — |  |  | — |
Production tax credits ("PTC") | — |  |  | (7) |  |  | (8) |
Recognition of uncertain tax benefits | (10) |  |  | 1 |  |  | (5) |
Alternative minimum tax ("AMT") refundable credit | — |  |  | (4) |  |  | (64) |
Tax Act - corporate income tax rate change | — |  |  | — |  |  | 665 |
Valuation allowance due to corporate income tax rate change | — |  |  | — |  |  | (660) |
Other | (13) |  |  | — |  |  | 8 |
Income tax (benefit)/expense | $ | (3,334) |  |  | $ | 7 |  |  | $ | (44) |
Effective income tax rate | (424.2) | % |  | 1.5 | % |  | 3.2 | %
Company's deferred tax assets and liabilities | The temporary differences, which gave rise to the Company's deferred tax assets and liabilities consisted of the following:
| As of December 31, |  |
(In millions) | 2019 |  | 2018
Deferred tax assets: |  |  |
Deferred compensation, accrued vacation and other reserves | $ | 81 |  |  | $ | 134 |
Difference between book and tax basis of property | 548 |  |  | 554 |
Goodwill | — |  |  | 11 |
Differences between book and tax basis of contracts | — |  |  | 38 |
Pension and other postretirement benefits | 86 |  |  | 87 |
Equity compensation | 11 |  |  | 9 |
Bad debt reserve | 13 |  |  | 14 |
U.S. Federal net operating loss carryforwards | 2,116 |  |  | 2,241 |
Foreign net operating loss carryforwards | 105 |  |  | 63 |
State net operating loss carryforwards | 360 |  |  | 379 |
Federal and state tax credit carryforwards | 384 |  |  | 381 |
Federal benefit on state uncertain tax positions | 4 |  |  | 6 |
Intangibles amortization (excluding goodwill) | — |  |  | 21 |
Interest disallowance carryforward per §163(j) of the Tax Act | 82 |  |  | 102 |
Inventory obsolescence | 7 |  |  | 7 |
Other | 3 |  |  | — |
Discontinued operations | — |  |  | 17 |
Total deferred tax assets | 3,800 |  |  | 4,064 |
Deferred tax liabilities: |  |  |
Emissions allowances | 19 |  |  | 15 |
Derivatives, net | 27 |  |  | 37 |
Goodwill | 8 |  |  | — |
Intangibles amortization (excluding goodwill) | 15 |  |  | — |
Equity method investments | 201 |  |  | 180 |
Convertible Debt | 19 |  |  | 21 |
Other | — |  |  | 1 |
Discontinued operations | — |  |  | 36 |
Total deferred tax liabilities | 289 |  |  | 290 |
Total deferred tax assets less deferred tax liabilities | 3,511 |  |  | 3,774 |
Valuation allowance | (242) |  |  | (3,812) |
Discontinued operations | — |  |  | 19 |
Total deferred tax assets/(liabilities), net of valuation allowance | $ | 3,269 |  |  | $ | (19) |
Summary of NRG's net deferred tax position | The following table summarizes NRG's net deferred tax position as presented in the consolidated balance sheets:
| As of December 31, |  |
(In millions) | 2019 |  | 2018
Deferred tax asset | $ | 3,286 |  |  | $ | 46 |
Deferred tax liability | (17) |  |  | (65) |
Net deferred tax asset/(liability) | $ | 3,269 |  |  | $ | (19) |
Reconciliation of total amounts of uncertain tax benefits | The following table summarizes uncertain tax benefits activity:
| As of December 31, |  |
(In millions) | 2019 |  | 2018
Balance as of January 1 | $ | 26 |  |  | $ | 30 |
Increase due to current year positions | 2 |  |  | 4 |
Settlements, payments and statute closure | (13) |  |  | (8) |
Uncertain tax benefits as of December 31 | $ | 15 |  |  | $ | 26 |

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