XML 37 R21.htm IDEA: XBRL DOCUMENT v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Effective Income Tax Rate
The income tax provision consisted of the following:
 Three months ended June 30,Six months ended June 30,
(In millions, except rates)2025202420252024
(Loss)/Income before income taxes$(153)$1,052 $832 $1,747 
Income tax (benefit)/expense(49)314 186 498 
Effective income tax rate32.0 %29.8 %22.4 %28.5 %
For the three months ended June 30, 2025, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax benefit and permanent differences.
For the six months ended June 30, 2025, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax expense, partially offset with favorable permanent differences.
For the three and six months ended June 30, 2024, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax expense and permanent differences.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted into law. The OBBB includes changes to U.S. tax law that will be applicable to NRG beginning in 2025. Any impact of the OBBB on the Company’s condensed consolidated financial statements will be reflected in the third quarter.
On September 12, 2024, Treasury and the IRS released proposed regulations that provide guidance on the application of the CAMT. The proposed regulations allow the exclusion of unrealized mark-to-market gains and losses, related to qualified hedge transactions, from adjusted financial statement income. The Company will continue to evaluate the applicable corporation status and the impact of the CAMT based on the proposed guidance. NRG as an applicable corporation is subject to the CAMT and has reflected the impact in its current and deferred taxes, however, there is no impact on the Company’s provision for income taxes from the CAMT for the three and six months ended June 30, 2025 and 2024.
Uncertain Tax Benefits
As of June 30, 2025, NRG had a non-current tax liability of $60 million for uncertain tax benefits from positions taken on various federal and state income tax returns inclusive of accrued interest. For the six months ended June 30, 2025, NRG accrued $1 million of interest relating to the uncertain tax benefits. As of June 30, 2025, NRG had cumulative interest and penalties related to these uncertain tax benefits of $5 million. The Company recognizes interest and penalties related to uncertain tax benefits in income tax expense.
NRG is subject to examination by taxing authorities for income tax returns filed in the U.S. federal jurisdiction and various state and foreign jurisdictions including operations located in Australia and Canada. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2021. With few exceptions, state and Canadian income tax examinations are no longer open for years prior to 2015.