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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Note 5 Income Taxes TDS’ current income taxes balances at December 31, 2021 and 2020, were as follows:
December 31, | 2021 |  | 2020
(Dollars in millions) |  |  |
Federal income taxes receivable | $ | 179 |  |  | $ | 180 |
Net state income taxes receivable | 5 |  |  | 7 |
Income tax expense (benefit) is summarized as follows:
Year Ended December 31, | 2021 |  | 2020 |  | 2019
(Dollars in millions) |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 2 |  |  | $ | (175) |  |  | $ | 15 |
State | (21) |  |  | 4 |  |  | 15 |
Deferred |  |  |  |  |
Federal | 59 |  |  | 179 |  |  | 36 |
State | (7) |  |  | 11 |  |  | (2) |
Total income tax expense (benefit) | $ | 33 |  |  | $ | 19 |  |  | $ | 64 |
A reconciliation of TDS’ income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to TDS’ effective income tax rate is as follows:
Year Ended December 31, | 2021 |  | 2020 |  | 2019
| Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Statutory federal income tax expense and rate | $ | 47 |  |  | 21.0 | % |  | $ | 60 |  |  | 21.0 | % |  | $ | 44 |  |  | 21.0 | %
State income taxes, net of federal benefit 1 | (23) |  |  | (10.3) |  |  | 11 |  |  | 4.0 |  |  | 12 |  |  | 5.5 |
Change in federal valuation allowance 2 | 7 |  |  | 3.1 |  |  | — |  |  | — |  |  | 7 |  |  | 3.1 |
Loss carryback benefit of CARES Act 3 | — |  |  | — |  |  | (60) |  |  | (21.0) |  |  | — |  |  | — |
Nondeductible compensation | 6 |  |  | 2.9 |  |  | 9 |  |  | 3.0 |  |  | 4 |  |  | 1.9 |
Tax credits | (2) |  |  | (0.8) |  |  | (2) |  |  | (0.6) |  |  | (4) |  |  | (1.9) |
Other differences, net | (2) |  |  | (0.8) |  |  | 1 |  |  | — |  |  | 1 |  |  | 0.7 |
Total income tax expense (benefit) and rate | $ | 33 |  |  | 15.1 | % |  | $ | 19 |  |  | 6.4 | % |  | $ | 64 |  |  | 30.3 | %
1 State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes in 2021 are a net benefit due primarily to the reduction of tax accruals resulting from expirations of state statute of limitations for prior tax years. 2 Change in federal valuation allowance is due primarily to interest expense carryforwards from partnership investments that may not be realized. 3 The CARES Act provides a 5-year carryback of net operating losses generated in years 2018-2020. As the statutory federal tax rate applicable to certain years within the carryback period is 35%, carryback to those years provides a tax benefit in excess of the current federal statutory rate of 21%. Significant components of TDS’ deferred income tax assets and liabilities at December 31, 2021 and 2020, were as follows:
December 31, | 2021 |  | 2020
(Dollars in millions) |  |  |
Deferred tax assets |  |  |
Net operating loss (NOL) carryforwards | $ | 226 |  |  | $ | 183 |
Lease liabilities | 277 |  |  | 257 |
Asset retirement obligation | 101 |  |  | 81 |
Other | 157 |  |  | 109 |
Total deferred tax assets | 761 |  |  | 630 |
Less valuation allowance | (149) |  |  | (158) |
Net deferred tax assets | 612 |  |  | 472 |
Deferred tax liabilities |  |  |
Property, plant and equipment | 751 |  |  | 652 |
Licenses/intangibles | 364 |  |  | 287 |
Partnership investments | 155 |  |  | 144 |
Lease assets | 255 |  |  | 235 |
Other | 6 |  |  | 17 |
Total deferred tax liabilities | 1,531 |  |  | 1,335 |
Net deferred income tax liability | $ | 919 |  |  | $ | 863 |
Presented in the Consolidated Balance Sheet as: |  |  |
Deferred income tax liability, net | $ | 921 |  |  | $ | 863 |
Other assets and deferred charges | (2) |  |  | — |
Net deferred income tax liability | $ | 919 |  |  | $ | 863 |
At December 31, 2021, TDS and certain subsidiaries had $3,149 million of state NOL carryforwards (generating a $165 million deferred tax asset) available to offset future taxable income. The state NOL carryforwards expire between 2022 and 2041. TDS and certain subsidiaries had $291 million of federal NOL carryforwards (generating a $61 million deferred tax asset) available to offset future taxable income. The federal NOL carryforwards generally expire between 2022 and 2037, with the exception of federal NOLs generated after 2017, which do not expire. A valuation allowance was established for certain federal and state NOL carryforwards since it is more likely than not that a portion of such carryforwards will expire before they can be utilized. A summary of TDS' deferred tax asset valuation allowance is as follows:
| 2021 |  | 2020 |  | 2019
(Dollars in millions) |  |  |  |  |
Balance at beginning of year | $ | 158 |  |  | $ | 152 |  |  | $ | 135 |
Charged to Income tax expense | (9) |  |  | 6 |  |  | 17 |
Balance at end of year | $ | 149 |  |  | $ | 158 |  |  | $ | 152 |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2021 |  | 2020 |  | 2019
(Dollars in millions) |  |  |  |  |
Unrecognized tax benefits balance at beginning of year | $ | 54 |  |  | $ | 49 |  |  | $ | 49 |
Additions for tax positions of current year | 8 |  |  | 8 |  |  | 8 |
Additions for tax positions of prior years | — |  |  | 3 |  |  | — |
Reductions for tax positions of prior years | (3) |  |  | (1) |  |  | (7) |
Reductions for settlements of tax positions | (2) |  |  | — |  |  | (1) |
Reductions for lapses in statutes of limitations | (20) |  |  | (5) |  |  | — |
Unrecognized tax benefits balance at end of year | $ | 37 |  |  | $ | 54 |  |  | $ | 49 |
Unrecognized tax benefits are included in Accrued taxes and Other deferred liabilities and credits in the Consolidated Balance Sheet. If these benefits were recognized at each respective year end period, they would have reduced income tax expense in 2021, 2020 and 2019 by $30 million, $43 million and $39 million, respectively, net of the federal benefit from state income taxes. TDS recognizes accrued interest and penalties related to unrecognized tax benefits in Income tax expense (benefit). The amounts charged to income tax expense related to interest and penalties resulted in a benefit of $10 million in 2021, and expenses of $2 million and $3 million in 2020 and 2019, respectively. Net accrued liabilities for interest and penalties were $13 million and $23 million at December 31, 2021 and 2020, respectively, and are included in Other deferred liabilities and credits in the Consolidated Balance Sheet. TDS and its subsidiaries file federal and state income tax returns. With limited exceptions, TDS is no longer subject to federal and state income tax audits for the years prior to 2018.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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