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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES:
Income tax (benefit) expense provided on earnings consisted of:
For the Years Ended December 31,
202420232022
Current:
U.S. Federal
$756 $— $— 
U.S. State
3,245 4,777 6,188 
4,001 4,777 6,188 
Deferred:
U.S. Federal
(27,917)455,224 (40,649)
U.S. State
(5,952)42,208 (35,409)
(33,869)497,432 (76,058)
Total Income Tax (Benefit) Expense $(29,868)$502,209 $(69,870)

The components of the net deferred taxes are as follows:

December 31,
20242023
Deferred Tax Assets:
Net Operating Loss- Federal
$137,476 $160,405 
   Gas Derivatives130,834 14,466 
Section 174 Expenses91,342 92,414 
Net Operating Loss - State
70,689 76,259 
Interest Limitation62,271 36,451 
Federal Tax Credits44,457 45,619 
Gas Well Closing33,541 24,652 
Operating Lease Liabilities25,650 36,297 
State Deferred Tax Adjustment15,983 15,983 
Salary Retirement8,037 8,488 
Equity Compensation6,659 5,419 
Convertible Note Amortization2,121 3,628 
Other
2,687 6,089 
Total Deferred Tax Assets
631,747 526,170 
Valuation Allowance
(36,879)(39,264)
Net Deferred Tax Assets
594,868 486,906 
Deferred Tax Liabilities:
Property, Plant and Equipment
(1,261,971)(1,177,773)
   Operating Lease Right-of-Use Assets(25,071)(35,321)
Investment in Partnerships(2,825)(2,303)
   Advance Gas Royalties(515)(404)
Other
(622)(559)
Total Deferred Tax Liabilities
(1,291,004)(1,216,360)
Net Deferred Tax Liability
$(696,136)$(729,454)
Deferred taxes are recorded for certain tax benefits, including net operating losses and tax credit carry-forwards, if management assesses the utilization of those assets to be more likely than not. A valuation allowance is required when it is not more likely than not that all or a portion of a deferred tax asset will be realized. All available evidence, both positive and negative, must be considered in determining the need for a valuation allowance. Positive evidence considered included financial earnings generated over the past three years for certain subsidiaries, reversals of financial to tax temporary differences and the implementation of and/or ability to employ various tax planning strategies. Negative evidence includes financial and tax losses generated in prior periods and the inability to achieve forecasted results for those periods.

As of December 31, 2024, the Company has a deferred tax asset related to federal net operating losses of $137,476. The pre-2018 federal net operating losses will expire at various times between 2035 and 2037. Because of the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020, the federal net operating losses (NOLs) generated in 2018 - 2021 do not expire but may only offset 80% of taxable income in any tax years beginning after 2020.

As of December 31, 2024 and 2023, the Company has $44,457 and $45,619, respectively, of Federal Tax Credits available to offset future federal tax. These credits expire between 2032 and 2044.

CNX has, on an after federal tax basis, a deferred tax asset related to state operating losses of $70,689 with a related valuation allowance of $36,879 at December 31, 2024. The deferred tax asset related to state operating losses, on an after-tax adjusted basis, was $76,259 with a related valuation allowance of $39,264 at December 31, 2023. A review of positive and negative evidence regarding these state tax attributes concluded that the valuation allowances for various CNX subsidiaries was warranted.

On December 31, 2023, the Company made a state law conversion of a subsidiary from a corporation to a limited liability company. The conversion effectively terminates the tax partnership treatment of CNX Midstream Partners, LP for federal and state income tax purposes. As such, the deferred tax assets and liabilities were reclassified and separately stated in the underlying deferred tax asset and liability categories, primarily Property, Plant and Equipment.

West Virginia enacted legislation in March 2023 for public companies which allows for a deduction for the deferred tax adjustment as of January 1, 2022 resulting from the change in state apportionment methodology from three factor to single sales factor and elimination of the throw-out rule if the change results in an aggregate increase in net deferred tax liabilities, decrease in net deferred tax assets, or change from a net deferred tax asset to a net deferred tax liability. The deduction is available over a ten-year period beginning with the first tax year on or after January 1, 2033. In 2023, the Company recorded an income tax benefit of $15,983 in the Consolidated Statements of Income to reflect the recent legislative change resulting in a decrease to deferred tax liabilities in the Consolidated Balance Sheets.

Pennsylvania enacted legislation in July 2022 that, among other things, gradually reduced the corporate net income tax rate over the next several years beginning in 2023 to 8.99% to ultimately 4.99% in 2031. Beginning in 2022 and in each year thereafter, the Company revised the deferred state income tax rates and apportionment factors for several states to reflect, among other things, the recent PA rate reduction resulting in a benefit to deferred tax expense in the Consolidated Statements of Income. Deferred taxes also include changes relating to valuation allowance assertions against various state net operating losses due to the tax accounting treatment of unrealized gains and losses on commodity derivatives.

Management will continue to assess the potential for realized deferred tax assets based upon income forecast data and the feasibility of future tax planning strategies and may record adjustments to valuation allowances against deferred tax assets in future periods, as appropriate, that could materially impact net income.
The following is a reconciliation, stated as a percentage of pretax income, of the United States statutory federal income tax rate to CNX's effective tax rate:
 For the Years Ended December 31,
 202420232022
 AmountPercentAmountPercentAmountPercent
Statutory U.S. Federal Income Tax Rate$(25,276)21.0 %$466,814 21.0 %$(44,509)21.0 %
Net Effect of State Income Taxes(4,610)3.8 83,379 3.8 (5,817)2.8 
Uncertain Tax Positions13,309 (11.1)17,673 0.8 14,440 (6.8)
Effect of Equity Compensation(40)— 1,036 — 2,254 (1.1)
Effect of Change in Valuation Allowance(2,385)2.0 (37,607)(1.7)(35,427)16.7 
Deferred Adjustments229 (0.2)(837)— 2,481 (1.2)
Effect of State Rate Changes2,806 (2.3)297 — 10,025 (4.7)
Effect of Federal Tax Credits(14,416)12.0 (28,974)(1.3)(15,723)7.4 
Other515 (0.4)428 — 2,406 (1.1)
Income Tax (Benefit) Expense / Effective Rate$(29,868)24.8 %$502,209 22.6 %$(69,870)33.0 %

The effective tax rate for the year ended December 31, 2024 differs from the U.S. federal statutory rate primarily due to federal income tax credits, offset by uncertain tax positions, state taxes, equity compensation, and the decrease in certain state valuation allowance assertions.

The effective tax rate for the year ended December 31, 2023 differs from the U.S. federal statutory rate primarily due to federal income tax credits, offset by uncertain tax positions, state taxes (West Virginia tax law change), equity compensation, and the decrease in certain state valuation allowance assertions as a result of a higher-than-expected unrealized gain on commodity derivative instruments generated during 2023.

The effective tax rate for the year ended December 31, 2022 differs from the U.S. federal statutory rate primarily due to federal income tax credits, offset by uncertain tax positions, state taxes, equity compensation, and the decrease in certain state valuation allowance assertions as a result of a reduction in the Pennsylvania corporate income tax rate applied to deferred taxes and a higher-than-expected unrealized loss on commodity derivative instruments generated during 2022.
A reconciliation of the beginning and ending gross amounts of unrecognized tax benefits is as follows:
For the Years Ended
December 31,
20242023
Balance at Beginning of Period$99,918 $82,245 
Increase in Unrecognized Tax Benefits Resulting from Tax Positions Taken During Current Period18,224 11,229 
(Decrease) Increase in Unrecognized Tax Benefits Resulting from Tax Positions Taken During Prior Periods(4,915)6,444 
Balance at End of Period$113,227 $99,918 

If these unrecognized tax benefits were recognized, $113,227 and $99,918 would affect CNX's effective income tax rate for 2024 and 2023, respectively.

In 2024 and 2023, CNX recognized an increase in unrecognized tax benefits of $18,224 and $11,229, respectively, for tax benefits resulting from tax positions taken and expected to be taken on our 2024 and 2023 federal tax returns for additional federal tax credits. CNX also recognized a change in unrecognized tax benefits of $(4,915) and 6,444, respectively, for tax benefits resulting from tax positions taken on our 2023 and 2022 federal tax returns for additional federal tax credits.

CNX recognizes accrued interest related to unrecognized tax benefits in its interest expense. As of December 31, 2024 and 2023, the Company reported no accrued liability relating to interest in Other Liabilities in the Consolidated Balance Sheets. During the years ended December 31, 2024 and 2023, CNX paid no interest related to income tax deficiencies.

CNX recognizes penalties accrued related to uncertain tax positions in its income tax expense. CNX had no accrued liabilities for tax penalties as of December 31, 2024 and 2023.
CNX and its subsidiaries file federal income tax returns with the United States and income tax returns within various states. With few exceptions, the Company is no longer subject to United States federal, state, or local income tax examinations by tax authorities for the years before 2021.