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TAXES | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
TAXES | TAXES Components of income tax expense are detailed in the following tables.
Evergy | 2020 |  | 2019 |  | 2018
Current income taxes | (millions)
Federal | $ | (26.8) |  |  | $ | (39.5) |  |  | $ | (67.4) |
State | 2.1 |  |  | 15.0 |  |  | 2.2 |
Total | (24.7) |  |  | (24.5) |  |  | (65.2) |
Deferred income taxes |  |  |  |  |
Federal | 73.1 |  |  | 93.2 |  |  | 160.1 |
State | 59.8 |  |  | 27.5 |  |  | (32.3) |
Total | 132.9 |  |  | 120.7 |  |  | 127.8 |
Investment tax credit |  |  |  |  |
Deferral | — |  |  | 5.2 |  |  | — |
Amortization | (6.0) |  |  | (4.4) |  |  | (3.6) |
Total | (6.0) |  |  | 0.8 |  |  | (3.6) |
Income tax expense | $ | 102.2 |  |  | $ | 97.0 |  |  | $ | 59.0 |
Evergy Kansas Central | 2020 |  | 2019 |  | 2018
Current income taxes | (millions)
Federal | $ | 14.5 |  |  | $ | 37.9 |  |  | $ | (0.3) |
State | (5.3) |  |  | 2.6 |  |  | (1.8) |
Total | 9.2 |  |  | 40.5 |  |  | (2.1) |
Deferred income taxes |  |  |  |  |
Federal | (16.7) |  |  | (8.9) |  |  | 43.5 |
State | 168.1 |  |  | 18.4 |  |  | (42.9) |
Total | 151.4 |  |  | 9.5 |  |  | 0.6 |
Investment tax credit |  |  |  |  |
Deferral | — |  |  | 5.2 |  |  | — |
Amortization | (4.8) |  |  | (3.1) |  |  | (2.8) |
Total | (4.8) |  |  | 2.1 |  |  | (2.8) |
Income tax expense (benefit) | $ | 155.8 |  |  | $ | 52.1 |  |  | $ | (4.3) |
Evergy Metro(a) | 2020 |  | 2019 |  | 2018
Current income taxes | (millions)
Federal | $ | (0.2) |  |  | $ | 43.9 |  |  | $ | 29.8 |
State | 10.8 |  |  | 22.4 |  |  | 8.9 |
Total | 10.6 |  |  | 66.3 |  |  | 38.7 |
Deferred income taxes |  |  |  |  |
Federal | 29.8 |  |  | (24.5) |  |  | (3.4) |
State | (32.2) |  |  | (5.0) |  |  | 53.0 |
Total | (2.4) |  |  | (29.5) |  |  | 49.6 |
Investment tax credit |  |  |  |  |
Amortization | (1.1) |  |  | (1.1) |  |  | (1.0) |
Total | (1.1) |  |  | (1.1) |  |  | (1.0) |
Income tax expense | $ | 7.1 |  |  | $ | 35.7 |  |  | $ | 87.3 |
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter. Effective Income Tax Rates Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
Evergy | 2020 |  | 2019 |  | 2018
Federal statutory income tax | 21.0 | % |  | 21.0 | % |  | 21.0 | %
COLI policies | (1.6) |  |  | (1.8) |  |  | (1.9) |
State income taxes | 4.3 |  |  | 5.0 |  |  | 4.9 |
Flow through depreciation for plant-related differences | (5.3) |  |  | (4.5) |  |  | 0.8 |
Federal tax credits | (4.6) |  |  | (4.9) |  |  | (6.4) |
Non-controlling interest | (0.3) |  |  | (0.4) |  |  | (0.4) |
AFUDC equity | (0.5) |  |  | (0.1) |  |  | (0.1) |
Amortization of federal investment tax credits | (0.6) |  |  | (0.5) |  |  | (0.6) |
Changes in uncertain tax positions, net | — |  |  | (0.2) |  |  | 0.1 |
Federal or state tax rate change | 1.9 |  |  | — |  |  | (8.7) |
Valuation allowance | (0.2) |  |  | (1.0) |  |  | 0.4 |
Stock compensation | (0.1) |  |  | 0.1 |  |  | (0.4) |
Officer compensation limitation | 0.2 |  |  | 0.1 |  |  | 1.2 |
Other | (0.2) |  |  | (0.4) |  |  | (0.2) |
Effective income tax rate | 14.0 | % |  | 12.4 | % |  | 9.7 | %
Evergy Kansas Central | 2020 |  | 2019 |  | 2018
Federal statutory income tax | 21.0 | % |  | 21.0 | % |  | 21.0 | %
COLI policies | (2.8) |  |  | (3.3) |  |  | (3.3) |
State income taxes | 3.8 |  |  | 5.3 |  |  | 5.0 |
Flow through depreciation for plant-related differences | (0.1) |  |  | (0.1) |  |  | 1.6 |
Federal tax credits | (7.1) |  |  | (7.4) |  |  | (10.4) |
Non-controlling interest | (0.6) |  |  | (0.8) |  |  | (0.6) |
AFUDC equity | (0.5) |  |  | (0.1) |  |  | (0.2) |
Amortization of federal investment tax credits | (0.7) |  |  | (0.7) |  |  | (0.8) |
Changes in uncertain tax positions, net | — |  |  | (0.4) |  |  | 0.1 |
Federal or state tax rate change | 27.8 |  |  | — |  |  | (15.3) |
Valuation allowance | — |  |  | (0.4) |  |  | 0.5 |
Stock compensation | (0.1) |  |  | (0.1) |  |  | (0.8) |
Officer compensation limitation | — |  |  | — |  |  | 1.8 |
Other | (0.9) |  |  | (0.3) |  |  | 0.2 |
Effective income tax rate | 39.8 | % |  | 12.7 | % |  | (1.2) | %
Evergy Metro(a) | 2020 |  | 2019 |  | 2018
Federal statutory income tax | 21.0 | % |  | 21.0 | % |  | 21.0 | %
COLI policies | (0.3) |  |  | (0.2) |  |  | (0.2) |
State income taxes | 4.9 |  |  | 4.7 |  |  | 5.5 |
Flow through depreciation for plant-related differences | (10.0) |  |  | (9.4) |  |  | (2.5) |
Federal tax credits | (1.9) |  |  | (2.5) |  |  | (2.1) |
AFUDC equity | (0.5) |  |  | (0.2) |  |  | (0.1) |
Amortization of federal investment tax credits | (0.4) |  |  | (0.4) |  |  | (0.4) |
Federal or state tax rate change | (10.5) |  |  | — |  |  | 14.1 |
Stock compensation | (0.4) |  |  | — |  |  | — |
Officer compensation limitation | 0.4 |  |  | 0.3 |  |  | 0.6 |
Other | — |  |  | (1.0) |  |  | (1.0) |
Effective income tax rate | 2.3 | % |  | 12.3 | % |  | 34.9 | %
(a)Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter. Deferred Income Taxes The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the consolidated balance sheets is in the following table.
| December 31
| 2020 |  | 2019
| Evergy |  | Evergy Kansas Central |  | Evergy Metro |  | Evergy |  | Evergy Kansas Central |  | Evergy Metro
Deferred tax assets: | (millions)
Tax credit carryforward | $ | 379.6 |  |  | $ | 176.5 |  |  | $ | 195.9 |  |  | $ | 548.9 |  |  | $ | 337.3 |  |  | $ | 204.4 |
Income taxes refundable to customers, net | 418.2 |  |  | 237.5 |  |  | 132.8 |  |  | 466.3 |  |  | 234.3 |  |  | 176.2 |
Deferred employee benefit costs | 227.6 |  |  | 105.4 |  |  | 117.9 |  |  | 197.0 |  |  | 93.4 |  |  | 120.4 |
Net operating loss carryforward | 51.0 |  |  | — |  |  | 0.2 |  |  | 163.4 |  |  | 23.1 |  |  | 61.9 |
Deferred state income taxes | 145.9 |  |  | 101.7 |  |  | 37.8 |  |  | 64.4 |  |  | 64.4 |  |  | — |
Alternative minimum tax carryforward | — |  |  | — |  |  | — |  |  | 37.9 |  |  | 13.4 |  |  | — |
Accrued liabilities | 152.7 |  |  | 61.8 |  |  | 61.0 |  |  | 80.4 |  |  | 14.5 |  |  | 29.1 |
Other | 181.0 |  |  | 91.4 |  |  | 44.8 |  |  | 183.2 |  |  | 99.1 |  |  | 55.1 |
Total deferred tax assets before valuation allowance | 1,556.0 |  |  | 774.3 |  |  | 590.4 |  |  | 1,741.5 |  |  | 879.5 |  |  | 647.1 |
Valuation allowances | (14.4) |  |  | — |  |  | — |  |  | (17.5) |  |  | — |  |  | — |
Total deferred tax assets, net | 1,541.6 |  |  | 774.3 |  |  | 590.4 |  |  | 1,724.0 |  |  | 879.5 |  |  | 647.1 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |
Plant-related | (2,693.7) |  |  | (1,341.2) |  |  | (972.1) |  |  | (3,004.8) |  |  | (1,428.3) |  |  | (1,143.2) |
Deferred employee benefit costs | (171.4) |  |  | (75.6) |  |  | (76.3) |  |  | (173.3) |  |  | (93.4) |  |  | (79.5) |
ARO regulatory assets | (136.7) |  |  | (49.9) |  |  | (54.3) |  |  | (102.3) |  |  | (53.4) |  |  | (13.8) |
Acquisition premium | (46.9) |  |  | (46.9) |  |  | — |  |  | (68.2) |  |  | (68.2) |  |  | — |
Other | (157.7) |  |  | (85.2) |  |  | (46.5) |  |  | (119.8) |  |  | (53.9) |  |  | (53.4) |
Total deferred tax liabilities | (3,206.4) |  |  | (1,598.8) |  |  | (1,149.2) |  |  | (3,468.4) |  |  | (1,697.2) |  |  | (1,289.9) |
Net deferred income tax liabilities | $ | (1,664.8) |  |  | $ | (824.5) |  |  | $ | (558.8) |  |  | $ | (1,744.4) |  |  | $ | (817.7) |  |  | $ | (642.8) |
Tax Credit Carryforwards At December 31, 2020 and 2019, Evergy had $379.6 million and $379.0 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2020 and 2019, Evergy Kansas Central had $176.5 million and $168.8 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2020 and 2019, Evergy Metro had $195.9 million and $203.2 million, respectively, of federal general business income tax credit carryforwards. The carryforwards for Evergy, Evergy Kansas Central and Evergy Metro relate primarily to wind production tax credits and advanced coal investment tax credits and expire in the years 2020 to 2040. Approximately $0.2 million of Evergy's credits are related to Low Income Housing credits that were acquired in Great Plains Energy's acquisition of Evergy Missouri West. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits to expire unutilized and has provided a valuation allowance against $0.2 million of the federal income tax benefit. The year of origin of Evergy's, Evergy Kansas Central's and Evergy Metro's related tax benefit amounts for federal tax credit carryforwards as of December 31, 2020 are detailed in the following table.
|  | Amount of Benefit |
Year of Origin |  | Evergy |  | Evergy Kansas Central |  | Evergy Metro |
|  | (millions) |
2003 |  | 0.1 |  |  | — |  |  | — |  |
2004 |  | 0.1 |  |  | — |  |  | — |  |
2005 |  | 0.1 |  |  | — |  |  | — |  |
2006 |  | 0.1 |  |  | — |  |  | — |  |
2007 |  | 0.1 |  |  | — |  |  | — |  |
2008 |  | 27.4 |  |  | 0.5 |  |  | 26.6 |  |
2009 |  | 47.7 |  |  | 0.2 |  |  | 47.3 |  |
2010 |  | 18.3 |  |  | — |  |  | 18.2 |  |
2011 |  | 13.3 |  |  | — |  |  | 13.2 |  |
2012 |  | 12.8 |  |  | 2.0 |  |  | 10.7 |  |
2013 |  | 24.3 |  |  | 11.3 |  |  | 12.9 |  |
2014 |  | 24.1 |  |  | 10.7 |  |  | 13.0 |  |
2015 |  | 24.7 |  |  | 10.9 |  |  | 13.2 |  |
2016 |  | 27.1 |  |  | 11.0 |  |  | 12.4 |  |
2017 |  | 43.9 |  |  | 35.1 |  |  | 8.2 |  |
2018 |  | 43.9 |  |  | 36.3 |  |  | 7.5 |  |
2019 |  | 37.7 |  |  | 30.9 |  |  | 6.7 |  |
2020 |  | 33.9 |  |  | 27.6 |  |  | 6.0 |  |
|  | $ | 379.6 |  |  | $ | 176.5 |  |  | $ | 195.9 |  |
At December 31, 2019, Evergy, Evergy Kansas Central and Evergy Metro had $169.9 million, $168.5 million and $1.2 million, respectively, of tax benefits related to state income tax credit carryforwards. The state income tax credits relate primarily to the Kansas high performance incentive program tax credits. As a result of the exemption from Kansas state income tax beginning in 2021, Evergy, Evergy Kansas Central and Evergy Metro wrote down their Kansas state income tax credit carryforwards in 2020, which were primarily offset by a corresponding decrease in unamortized investment tax credit liability. Net Operating Loss Carryforwards At December 31, 2020 and 2019, Evergy had $42.2 million and $132.4 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards. At December 31, 2019, Evergy Kansas Central and Evergy Metro had $12.3 million and $56.2 million, respectively, of tax benefits related to federal NOL carryforwards. Approximately $7.1 million of Evergy's tax benefits at December 31, 2020 are related to NOLs that were acquired in the Evergy Missouri West acquisition. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these federal NOL carryforwards to expire unutilized and has provided a valuation allowance against $7.1 million of the federal income tax benefit. The federal NOL carryforwards expire in years 2023 to 2024. The year of origin of Evergy's related tax benefit amounts for federal NOL carryforwards as of December 31, 2020 are detailed in the following table.
Year of Origin |  | Amount of Benefit |
|  | (millions)
2005 |  | $ | 10.2 |  |
2006 |  | 32.0 |  |
|  | $ | 42.2 |  |
In addition, Evergy also had deferred tax benefits of $8.8 million and $31.0 million related to state NOLs as of December 31, 2020 and 2019, respectively. Evergy Kansas Central had deferred tax benefits of $10.8 million related to state NOLs as of December 31, 2019. Evergy Metro had deferred tax benefits of $0.2 million and $5.7 million related to state NOLs as of December 31, 2020 and 2019, respectively. The state NOL carryforwards expire in years 2021 to 2038. Evergy does not expect to utilize $7.1 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $7.1 million of state tax benefits. Alternative Minimum Tax Carryforwards At December 31, 2019, Evergy and Evergy Kansas Central had $37.9 million and $13.4 million, respectively, of federal AMT carryforwards. Valuation Allowances Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment threshold. This assessment takes into consideration tax planning strategies within Evergy's control. As a result of this assessment, Evergy has established a partial valuation allowance for federal and state tax NOL carryforwards and tax credit carryforwards. During 2020, $3.1 million of tax benefit was recorded in continuing operations primarily related to utilization or expiration of certain state NOL carryforwards. Kansas Tax Reform In May 2020, the state of Kansas exempted certain public utilities, including Evergy Kansas Central and Evergy Metro, from Kansas corporate income tax beginning in 2021 and authorized the KCC to approve changes in rates related to increases or decreases in federal or state income tax rates. As a result of the exemption from Kansas corporate income tax, the Evergy Companies revalued their deferred income tax assets and liabilities in May 2020. Evergy decreased its net deferred income tax liabilities by $233.8 million, primarily consisting of a $400.4 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $31.7 million tax gross-up adjustment on this amount for ratemaking purposes and $13.8 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates; partially offset by a decrease to unamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes. Evergy Kansas Central decreased its net deferred income tax liabilities by $17.6 million, primarily consisting of a $293.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $17.3 million tax gross-up adjustment on this amount for ratemaking purposes; partially offset by a decrease to unamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes and $109.0 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates. Evergy Metro decreased its net deferred income tax liabilities by $152.9 million, primarily consisting of a $106.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $14.4 million tax gross-up adjustment on this amount for ratemaking purposes and $32.2 million of income tax benefit primarily related to the revaluation of deferred income taxes that will not be refunded to customers in future rates. The changes to the Evergy Companies' net deferred income tax liabilities included in rate base were offset by corresponding changes in regulatory liabilities. The net regulatory liabilities will be refunded to customers in future rates by amortizing the amounts related to plant assets over the remaining useful life of the assets, and amortizing the amounts related to other items over a period to be determined in a future rate case. The changes to the Evergy Companies' unamortized investment tax credits were related to the portion of certain Kansas income tax credits that are not expected to be used after December 31, 2020. The amounts of income tax expense (benefit) recognized by the Evergy Companies related to the revaluation of deferred income taxes that will not be recovered from or refunded to customers in future rates primarily pertain to deferred tax adjustments related to the difference between Evergy's consolidated tax rate and the statutory tax rates used for setting rates at Evergy Kansas Central, Evergy Metro and Evergy Missouri West as well as deferred income tax adjustments related to non-regulated operations. Evergy Kansas Central and Evergy Metro currently recover the cost of Kansas corporate income taxes in rates from their customers at the statutory rate of 7% that will be effective until 2021, when the income tax exemption established by the state of Kansas takes effect. In accordance with the provisions of the income tax exemption, Evergy Metro and Evergy Kansas Central filed a joint application with the KCC in July 2020 to reduce their retail rates to reflect their exemption from Kansas corporate income taxes. In the joint application, Evergy Metro requested to implement its rate reduction in one phase, effective January 1, 2021, and Evergy Kansas Central requested to implement its rate reduction in three phases, effective January 1 in each of 2021, 2022 and 2023. In November 2020, the KCC approved Evergy Kansas Central's and Evergy Metro's joint application. Missouri Tax Reform On June 1, 2018, the Missouri governor signed Senate Bill (S.B.) 884 into law. Most notably, S.B. 884 reduces the corporate income tax rate from 6.25% to 4.0% beginning in 2020, provides for the mandatory use of the single sales factor formula and eliminates intercompany transactions between corporations that file a consolidated Missouri income tax return. As a result of the change in the Missouri corporate income tax rate, Evergy Metro revalued and restated its deferred income tax assets and liabilities as of June 1, 2018. Evergy Metro decreased its net deferred income tax liabilities by $46.6 million, primarily consisting of a $28.8 million adjustment for the revaluation and restatement of deferred income tax assets and liabilities included in Missouri jurisdictional rate base and a $9.9 million tax gross-up adjustment for ratemaking purposes. The decrease to Evergy Metro's net deferred income tax liabilities included in Missouri jurisdictional rate base were offset by a corresponding increase in regulatory liabilities. The net regulatory liabilities will be amortized to customers over a period to be determined in a future rate case. Evergy Metro recognized $15.5 million of income tax benefit in 2018 primarily related to the difference between Evergy Metro's revaluation of its deferred income tax assets and liabilities for financial reporting purposes and the amount of the revaluation pertaining to Evergy Metro's Missouri jurisdictional rate base.

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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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