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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
Note 5 Income Taxes
TDS’ current income taxes balances at December 31, 2024 and 2023, were as follows:
December 31,20242023
(Dollars in millions)  
Federal income taxes receivable (payable)$(1)$1 
Net state income taxes receivable2 3 
Income tax expense (benefit) is summarized as follows:
Year Ended December 31,202420232022
(Dollars in millions)   
Current   
Federal$3 $(1)$1 
State— 3 5 
Deferred
Federal(5)(10)32 
State8 18 15 
Total income tax expense (benefit)$6 $10 $53 
A reconciliation of TDS’ income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax rate to TDS’ effective income tax rate is as follows:
Year Ended December 31,202420232022
 AmountRateAmountRateAmountRate
(Dollars in millions)      
Statutory federal income tax expense and rate$(4)21.0 %$(100)21.0 %$26 21.0 %
State income taxes, net of federal benefit1
6 (32.4)16 (3.4)16 12.8 
Change in federal valuation allowance2
20 (99.1)8 (1.7)7 5.7 
Goodwill impairment3
— — 83 (17.4)— — 
Sale of businesses(15)74.0 — — — — 
Nondeductible compensation3 (13.5)7 (1.4)7 5.6 
Tax credits(2)11.7 (3)0.6 (2)(1.9)
Other differences, net(2)4.2 (1)0.2 (1)(0.6)
Total income tax expense (benefit) and rate$6 (34.1)%$10 (2.1)%$53 42.6 %
1State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to state valuation allowances. State taxes in 2022 and 2023 include discrete valuation allowance adjustments that did not recur in 2024.
2Change in federal valuation allowance is due primarily to capital losses from the sale of businesses and annual interest expense from partnership investments that carryforward but may not be realized.
3Goodwill impairment reflects the federal tax effect of the portion of the impaired goodwill that is not amortizable for income tax purposes. See Note 8 — Intangible Assets for additional information related to the goodwill impairment.
Significant components of TDS’ deferred income tax assets and liabilities at December 31, 2024 and 2023, were as follows:
December 31,20242023
(Dollars in millions)  
Deferred tax assets  
Net operating loss (NOL) carryforwards$268 $284 
Lease liabilities253 260 
Contract liabilities60 61 
Interest expense carryforwards176 133 
Asset retirement obligation136 123 
Other109 98 
Total deferred tax assets1,002 959 
Less valuation allowance(266)(216)
Net deferred tax assets736 743 
Deferred tax liabilities
Property, plant and equipment817 841 
Licenses/intangibles423 410 
Partnership investments191 181 
Lease assets238 242 
Other48 44 
Total deferred tax liabilities1,717 1,718 
Net deferred income tax liability$981 $975 
At December 31, 2024, TDS and certain subsidiaries had $234 million of federal NOL carryforwards (generating a $49 million deferred tax asset) available to offset future taxable income, subject to certain limitations. The federal NOL carryforwards generally expire between 2025 and 2037, with the exception of federal NOLs generated after 2017, which do not expire. TDS and certain subsidiaries had $4,526 million of state NOL carryforwards (generating a $218 million deferred tax asset) available to offset future taxable income. The state NOL carryforwards generally expire between 2025 and 2044. 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. 
At December 31, 2024, TDS and certain subsidiaries had $696 million of federal interest expense carryforwards (generating a $146 million deferred tax asset) available to offset future taxable income. The federal interest expense carryforwards do not expire. TDS and certain subsidiaries had $742 million of state interest expense carryforwards (generating a $30 million deferred tax asset) available to offset future taxable income. The state interest expense carryforwards generally do not expire. A valuation allowance was established for certain federal and state interest expense carryforwards since it is more likely than not that a portion of such carryforwards will not be utilized.
A summary of TDS' deferred tax asset valuation allowance is as follows:
 202420232022
(Dollars in millions)   
Balance at beginning of year$216 $177 $149 
Charged to Income tax expense54 39 28 
Charged to (Gain) loss on sale of business and other exit costs, net(4)— — 
Balance at end of year$266 $216 $177 
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 202420232022
(Dollars in millions)   
Unrecognized tax benefits balance at beginning of year$40 $38 $37 
Additions for tax positions of current year7 10 6 
Additions for tax positions of prior years— — 1 
Reductions for tax positions of prior years(7)(2)— 
Reductions for lapses in statutes of limitations(7)(6)(6)
Unrecognized tax benefits balance at end of year$33 $40 $38 
Unrecognized tax benefits are included in 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 by $26 million, $31 million and $30 million in 2024, 2023 and 2022, 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 were immaterial in 2024, 2023 and 2022. Net accrued liabilities for interest and penalties were $13 million at December 31, 2024 and 2023, 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 2021.