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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income tax provision from continuing operations | The income tax provision consisted of the following amounts:
| Year Ended December 31,
(In millions, except effective income tax rate) | 2023 |  | 2022 |  | 2021
Current |  |  |  |  |
U.S. Federal | $ | 26 |  |  | $ | 3 |  |  | $ | — |
State | 84 |  |  | 65 |  |  | 48 |
Foreign | (12) |  |  | 3 |  |  | 3 |
Total — current | 98 |  |  | 71 |  |  | 51 |
Deferred |  |  |  |  |
U.S. Federal | 50 |  |  | 258 |  |  | 569 |
State | (61) |  |  | 59 |  |  | 36 |
Foreign | (98) |  |  | 54 |  |  | 16 |
Total — deferred | (109) |  |  | 371 |  |  | 621 |
Total income tax (benefit)/expense | $ | (11) |  |  | $ | 442 |  |  | $ | 672 |
Effective income tax rate | 5.2 | % |  | 26.6 | % |  | 23.5 | %
Domestic and foreign components of income/(loss) before income tax (benefit)/expense | The following represented the domestic and foreign components of income before income taxes:
| Year Ended December 31,
(In millions) | 2023 |  | 2022 |  | 2021
U.S. | $ | 261 |  |  | $ | 1,436 |  |  | $ | 2,759 |
Foreign | (474) |  |  | 227 |  |  | 100 |
Total | $ | (213) |  |  | $ | 1,663 |  |  | $ | 2,859 |
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) | 2023 |  | 2022 |  | 2021
(Loss)/Income before income taxes | $ | (213) |  |  | $ | 1,663 |  |  | $ | 2,859 |
Tax at federal statutory tax rate | (45) |  |  | 349 |  |  | 600 |
State taxes | (22) |  |  | 69 |  |  | 111 |
Foreign rate differential | (10) |  |  | 7 |  |  | (3) |
Changes in state valuation allowances | 42 |  |  | (3) |  |  | (29) |
Permanent differences | 31 |  |  | 17 |  |  | 8 |
Recognition of uncertain tax benefits | 12 |  |  | 8 |  |  | (10) |
Deferred impact of state tax rate changes | 3 |  |  | 14 |  |  | (10) |
Foreign tax refunds | (17) |  |  | — |  |  | — |
Return to provision adjustments | (5) |  |  | — |  |  | 5 |
Carbon capture tax credits | — |  |  | (19) |  |  | — |
Income tax (benefit)/expense | $ | (11) |  |  | $ | 442 |  |  | $ | 672 |
Effective income tax rate | 5.2 | % |  | 26.6 | % |  | 23.5 | %
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) | 2023 |  | 2022
Deferred tax assets: |  |  |
U.S. Federal net operating loss carryforwards | $ | 1,762 |  |  | $ | 1,717 |
State net operating loss carryforwards | 367 |  |  | 315 |
Foreign net operating loss carryforwards | 110 |  |  | 104 |
Deferred revenues | 347 |  |  | — |
Difference between book and tax basis of property | 353 |  |  | 399 |
Federal and state tax credit carryforwards | 317 |  |  | 393 |
Deferred compensation, accrued vacation and other reserves | 141 |  |  | 93 |
Interest disallowance carryforward per §163(j) of the Tax Act | 132 |  |  | 65 |
Pension and other postretirement benefits | 48 |  |  | 62 |
Allowance for credit losses | 35 |  |  | 33 |
Equity compensation | 24 |  |  | 8 |
Federal benefit on state uncertain tax positions | 13 |  |  | 5 |
Inventory obsolescence | 11 |  |  | 10 |
U.S. capital loss | 1 |  |  | 15 |
Other | 33 |  |  | 22 |
Total deferred tax assets | 3,694 |  |  | 3,241 |
Deferred tax liabilities: |  |  |
Intangibles amortization (excluding goodwill) | 726 |  |  | 269 |
Derivatives | 156 |  |  | 874 |
Capitalized contract costs | 131 |  |  | — |
Equity method investments | 93 |  |  | 82 |
Goodwill | 40 |  |  | 26 |
Debt discount amortization | 26 |  |  | — |
Emissions allowances | 18 |  |  | 19 |
Total deferred tax liabilities | 1,190 |  |  | 1,270 |
Total deferred tax assets less deferred tax liabilities | 2,504 |  |  | 1,971 |
Valuation allowance | (275) |  |  | (224) |
Total net deferred tax assets, net of valuation allowance | $ | 2,229 |  |  | $ | 1,747 |
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) | 2023 |  | 2022
Deferred tax asset | $ | 2,251 |  |  | $ | 1,881 |
Deferred tax liability | (22) |  |  | (134) |
Net deferred tax asset | $ | 2,229 |  |  | $ | 1,747 |
Reconciliation of total amounts of uncertain tax benefits | The following table summarizes uncertain tax benefits activity:
| As of December 31,
(In millions) | 2023 |  | 2022
Balance as of January 1 | $ | 22 |  |  | $ | 13 |
Increase due to current year positions | 28 |  |  | 9 |
Increase due to acquired balance from Vivint Smart Home | 23 |  |  | — |
Uncertain tax benefits as of December 31 | $ | 73 |  |  | $ | 22 |

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