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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income taxes receivable (payable) | TDS’ current income taxes balances at December 31, 2023 and 2022, were as follows:
December 31, | 2023 |  | 2022
(Dollars in millions) |  |  |
Federal income taxes receivable | $ | 1 |  |  | $ | 56 |
Net state income taxes receivable | 3 |  |  | 3 |
Income tax expense (benefit) | Income tax expense (benefit) is summarized as follows:
Year Ended December 31, | 2023 |  | 2022 |  | 2021
(Dollars in millions) |  |  |  |  |
Current |  |  |  |  |
Federal | $ | (1) |  |  | $ | 1 |  |  | $ | 2 |
State | 3 |  |  | 5 |  |  | (21) |
Deferred |  |  |  |  |
Federal | (10) |  |  | 32 |  |  | 59 |
State | 18 |  |  | 15 |  |  | (7) |
Total income tax expense (benefit) | $ | 10 |  |  | $ | 53 |  |  | $ | 33 |
Income tax reconciliation | 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, | 2023 |  | 2022 |  | 2021
| Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Statutory federal income tax expense and rate | $ | (100) |  |  | 21.0 | % |  | $ | 26 |  |  | 21.0 | % |  | $ | 47 |  |  | 21.0 | %
State income taxes, net of federal benefit 1 | 16 |  |  | (3.4) |  |  | 16 |  |  | 12.8 |  |  | (23) |  |  | (10.3) |
Change in federal valuation allowance 2 | 8 |  |  | (1.7) |  |  | 7 |  |  | 5.7 |  |  | 7 |  |  | 3.1 |
Goodwill impairment 3 | 83 |  |  | (17.4) |  |  | — |  |  | — |  |  | — |  |  | — |
Nondeductible compensation | 7 |  |  | (1.4) |  |  | 7 |  |  | 5.6 |  |  | 6 |  |  | 2.9 |
Tax credits | (3) |  |  | 0.6 |  |  | (2) |  |  | (1.9) |  |  | (2) |  |  | (0.8) |
Other differences, net | (1) |  |  | 0.2 |  |  | (1) |  |  | (0.6) |  |  | (2) |  |  | (0.8) |
Total income tax expense (benefit) and rate | $ | 10 |  |  | (2.1) | % |  | $ | 53 |  |  | 42.6 | % |  | $ | 33 |  |  | 15.1 | %
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 annual interest expense from partnership investments that carryforward but may not be realized. 3 Goodwill impairment reflects the federal tax effect of the portion of the impaired goodwill that is not amortizable for income tax purposes. See Note 7 — Intangible Assets for additional information related to the goodwill impairment.
Deferred income tax assets and liabilities | Significant components of TDS’ deferred income tax assets and liabilities at December 31, 2023 and 2022, were as follows:
December 31, | 2023 |  | 2022
(Dollars in millions) |  |  |
Deferred tax assets |  |  |
Net operating loss (NOL) carryforwards | $ | 284 |  |  | $ | 250 |
Lease liabilities | 260 |  |  | 265 |
Contract liabilities | 61 |  |  | 63 |
Interest expense carryforwards | 133 |  |  | 74 |
Asset retirement obligation | 123 |  |  | 116 |
Other | 98 |  |  | 129 |
Total deferred tax assets | 959 |  |  | 897 |
Less valuation allowance | (216) |  |  | (177) |
Net deferred tax assets | 743 |  |  | 720 |
Deferred tax liabilities |  |  |
Property, plant and equipment | 841 |  |  | 805 |
Licenses/intangibles | 410 |  |  | 419 |
Partnership investments | 181 |  |  | 173 |
Lease assets | 242 |  |  | 245 |
Other | 44 |  |  | 43 |
Total deferred tax liabilities | 1,718 |  |  | 1,685 |
Net deferred income tax liability | $ | 975 |  |  | $ | 965 |
Presented in the Consolidated Balance Sheet as: |  |  |
Deferred income tax liability, net | $ | 975 |  |  | $ | 969 |
Other assets and deferred charges | — |  |  | (4) |
Net deferred income tax liability | $ | 975 |  |  | $ | 965 |
Deferred tax valuation allowance | A summary of TDS' deferred tax asset valuation allowance is as follows:
| 2023 |  | 2022 |  | 2021
(Dollars in millions) |  |  |  |  |
Balance at beginning of year | $ | 177 |  |  | $ | 149 |  |  | $ | 158 |
Charged to Income tax expense | 39 |  |  | 28 |  |  | (9) |
Balance at end of year | $ | 216 |  |  | $ | 177 |  |  | $ | 149 |
Income tax unrecognized benefits summary | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2023 |  | 2022 |  | 2021
(Dollars in millions) |  |  |  |  |
Unrecognized tax benefits balance at beginning of year | $ | 38 |  |  | $ | 37 |  |  | $ | 54 |
Additions for tax positions of current year | 10 |  |  | 6 |  |  | 8 |
Additions for tax positions of prior years | — |  |  | 1 |  |  | — |
Reductions for tax positions of prior years | (2) |  |  | — |  |  | (3) |
Reductions for settlements of tax positions | — |  |  | — |  |  | (2) |
Reductions for lapses in statutes of limitations | (6) |  |  | (6) |  |  | (20) |
Unrecognized tax benefits balance at end of year | $ | 40 |  |  | $ | 38 |  |  | $ | 37 |

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