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Income Taxes
 6 Months Ended
Jun. 30, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
FirstEnergy’s interim effective tax rates reflect the estimated annual effective tax rates for 2022 and 2021. These tax rates are affected by estimated annual permanent items, such as AFUDC equity and other flow-through items, as well as discrete items that may occur in any given period but are not consistent from period to period.

FirstEnergy’s effective tax rate for the three months ended June 30, 2022 and 2021, was 20.3% and 62.3%, respectively. The decrease in effective tax rate was primarily due to the non-deductibility of the DPA monetary penalty and the remeasurement of West Virginia deferred income taxes resulting from a state tax law change, as well as additional benefits in 2022 from flow-through items and amortization of excess deferred taxes.

FirstEnergy’s effective tax rate for the six months ended June 30, 2022 and 2021, was 21.6% and 31.8%, respectively. The decrease in effective tax rate was primarily due to the non-deductibility of the DPA monetary penalty and remeasurement of West Virginia deferred income taxes resulting from a state law change, as well as additional benefits in 2022 from flow-through items and amortization of excess deferred taxes, partially offset by a $14 million net tax benefit for federal tax credits claimed in 2021.

In February 2022, the IRS completed its examination of FirstEnergy’s 2020 federal income tax return and issued a Full Acceptance Letter with no adjustment to FirstEnergy’s taxable income.
There was no material change to FirstEnergy’s reserve for uncertain tax positions for the six months ended June 30, 2022, and it remains reasonably possible that approximately $31 million of unrecognized tax benefits may be resolved in the next twelve months as a result of settlements with taxing authorities or the statute of limitations expiring, of which $24 million would ultimately affect FirstEnergy’s effective tax rate.

On July 8, 2022, Pennsylvania’s governor signed into law a reduction to the corporate net income tax rate to be phased in over nine years from the current 9.99% to 4.99% by 2031. FirstEnergy is currently evaluating the impacts of the law change for its subsidiaries that do business in Pennsylvania.