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Income Taxes | 9 Months Ended
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Sep. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 6. Income Taxes Reconciliations of income tax expense (benefit) for the periods ended September 30 are as follows.
(PPL)
| Three Months |  | Nine Months
| 2020 |  | 2019 |  | 2020 |  | 2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $ | 103 |  |  | $ | 125 |  |  | $ | 336 |  |  | $ | 359 |
Increase (decrease) due to: |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 15 |  |  | 13 |  |  | 39 |  |  | 34 |
Valuation allowance adjustments | 7 |  |  | 7 |  |  | 20 |  |  | 21 |
Impact of lower U.K. income tax rates | 2 |  |  | (6) |  |  | (18) |  |  | (20) |
Impact of the U.K. Finance Acts on deferred tax balances (a) | 104 |  |  | (5) |  |  | 101 |  |  | (8) |
Depreciation and other items not normalized | — |  |  | (2) |  |  | (4) |  |  | (5) |
Amortization of excess deferred federal and state income taxes | (11) |  |  | (9) |  |  | (34) |  |  | (30) |
Federal and state income tax return adjustments | (9) |  |  | — |  |  | (9) |  |  | 1 |
Interest benefit on U.K. financing entities | (3) |  |  | (3) |  |  | (8) |  |  | (9) |
Officers compensation disallowance | 1 |  |  | — |  |  | 5 |  |  | 2 |
Kentucky recycling credit, net of federal income tax expense (b) | — |  |  | — |  |  | — |  |  | (20) |
Other | — |  |  | (2) |  |  | (5) |  |  | 3 |
Total increase (decrease) | 106 |  |  | (7) |  |  | 87 |  |  | (31) |
Total income tax expense (benefit) | $ | 209 |  |  | $ | 118 |  |  | $ | 423 |  |  | $ | 328 |
(a) The U.K. corporation tax rate was scheduled to be reduced from 19% to 17%, effective April 1, 2020. On March 11, 2020, the U.K. Finance Act 2020 included a cancellation of the tax rate reduction to 17%, thereby maintaining the corporation tax rate at 19%. The Finance Act 2020 was formally enacted on July 22, 2020. The primary impact of the cancellation of the corporation tax rate reduction was an increase in deferred tax liabilities and a corresponding deferred tax expense of $106 million. (b) During the second quarter of 2019, LKE recorded a deferred income tax benefit associated with two projects placed into service that prepare a generation waste material for reuse and, as a result, qualify for a Kentucky recycling credit. The applicable credit provides tax benefits for a portion of the equipment costs for major recycling projects in Kentucky. A portion of this amount has been reserved due to insufficient Kentucky taxable income projected at LKE.
(PPL Electric) |  |  |  |  |  |  |
| Three Months |  | Nine Months
| 2020 |  | 2019 |  | 2020 |  | 2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $ | 37 |  |  | $ | 33 |  |  | $ | 104 |  |  | $ | 94 |
Increase (decrease) due to: |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 14 |  |  | 13 |  |  | 39 |  |  | 36 |
Federal and state income tax return adjustments | (4) |  |  | — |  |  | (4) |  |  | 1 |
Depreciation and other items not normalized | — |  |  | (2) |  |  | (4) |  |  | (5) |
Amortization of excess deferred federal and state income taxes | (4) |  |  | (4) |  |  | (12) |  |  | (12) |
Other | 1 |  |  | — |  |  | 2 |  |  | — |
Total increase (decrease) | 7 |  |  | 7 |  |  | 21 |  |  | 20 |
Total income tax expense (benefit) | $ | 44 |  |  | $ | 40 |  |  | $ | 125 |  |  | $ | 114 |
(LKE) |  |  |  |  |  |  |
| Three Months |  | Nine Months
| 2020 |  | 2019 |  | 2020 |  | 2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $ | 35 |  |  | $ | 42 |  |  | $ | 92 |  |  | $ | 98 |
Increase (decrease) due to: |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 7 |  |  | 8 |  |  | 17 |  |  | 18 |
Amortization of investment tax credit | (1) |  |  | (1) |  |  | (2) |  |  | (2) |
Valuation allowance adjustments (a) | — |  |  | — |  |  | — |  |  | 3 |
Amortization of excess deferred federal and state income taxes | (7) |  |  | (5) |  |  | (20) |  |  | (17) |
Federal and state income tax return adjustments | (5) |  |  | 1 |  |  | (5) |  |  | 1 |
Kentucky recycling credit, net of federal income tax expense (a) | — |  |  | — |  |  | — |  |  | (20) |
Other | 2 |  |  | (2) |  |  | — |  |  | (3) |
Total increase (decrease) | (4) |  |  | 1 |  |  | (10) |  |  | (20) |
Total income tax expense (benefit) | $ | 31 |  |  | $ | 43 |  |  | $ | 82 |  |  | $ | 78 |
(a)During the second quarter of 2019, LKE recorded a deferred income tax benefit associated with two projects placed into service that prepare a generation waste material for reuse and, as a result, qualify for a Kentucky recycling credit. The applicable credit provides tax benefits for a portion of the equipment costs for major recycling projects in Kentucky. A portion of this amount has been reserved due to insufficient Kentucky taxable income projected at LKE.
(LG&E) |  |  |  |  |  |  |
| Three Months |  | Nine Months
| 2020 |  | 2019 |  | 2020 |  | 2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $ | 18 |  |  | $ | 21 |  |  | $ | 50 |  |  | $ | 50 |
Increase (decrease) due to: |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 3 |  |  | 4 |  |  | 9 |  |  | 9 |
Valuation allowance adjustments (a) | — |  |  | — |  |  | — |  |  | 15 |
Amortization of excess deferred federal and state income taxes | (3) |  |  | (2) |  |  | (8) |  |  | (7) |
Federal and state income tax return adjustments | (2) |  |  | 1 |  |  | (2) |  |  | 1 |
Kentucky recycling credit, net of federal income tax expense (a) | — |  |  | — |  |  | — |  |  | (15) |
Other | — |  |  | (2) |  |  | (2) |  |  | (2) |
Total increase (decrease) | (2) |  |  | 1 |  |  | (3) |  |  | 1 |
Total income tax expense (benefit) | $ | 16 |  |  | $ | 22 |  |  | $ | 47 |  |  | $ | 51 |
(a)During the second quarter of 2019, LG&E recorded a deferred income tax benefit associated with two projects placed into service that prepare a generation waste material for reuse and, as a result, qualify for a Kentucky recycling credit. The applicable credit provides tax benefits for a portion of the equipment costs for major recycling projects in Kentucky. This amount has been reserved due to insufficient Kentucky taxable income projected at LG&E.
(KU) |  |  |  |  |  |  |
| Three Months |  | Nine Months
| 2020 |  | 2019 |  | 2020 |  | 2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $ | 22 |  |  | $ | 25 |  |  | $ | 56 |  |  | $ | 63 |
Increase (decrease) due to: |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 4 |  |  | 5 |  |  | 11 |  |  | 12 |
Valuation allowance adjustments (a) | — |  |  | — |  |  | — |  |  | 5 |
Amortization of excess deferred federal and state income taxes | (4) |  |  | (3) |  |  | (12) |  |  | (10) |
Federal and state income tax return adjustments | (3) |  |  | — |  |  | (3) |  |  | — |
Kentucky recycling credit, net of federal income tax expense (a) | — |  |  | — |  |  | — |  |  | (5) |
Other | — |  |  | (1) |  |  | (2) |  |  | (3) |
Total increase (decrease) | (3) |  |  | 1 |  |  | (6) |  |  | (1) |
Total income tax expense (benefit) | $ | 19 |  |  | $ | 26 |  |  | $ | 50 |  |  | $ | 62 |
(a)During the second quarter of 2019, KU recorded a deferred income tax benefit associated with a project placed into service that prepares a generation waste material for reuse and, as a result, qualifies for a Kentucky recycling credit. The applicable credit provides tax benefits for a portion of the equipment costs for major recycling projects in Kentucky. This amount has been reserved due to insufficient Kentucky taxable income projected at KU. Other 2020 TCJA Regulatory Update (All Registrants) In July 2020, the IRS issued final and new proposed regulations relating to limitations on interest deductibility for tax purposes. The Registrants will apply the final regulations beginning in the 2021 tax year. The proposed regulations will apply in the year in which the regulations are issued in final form, which is expected to be in 2021 or later. The Registrants are evaluating the final and proposed regulations, but do not expect the regulations to have a material impact on the Registrants’ financial condition or results of operations.

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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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