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Income Tax Expense
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Tax Expense [Text Block] INCOME TAX EXPENSE
Three Months Ended
March 31
 20232022
Millions  
Current Income Tax Expense (a)
  
Federal$5.6 — 
State2.2 $0.1 
Total Current Income Tax Expense$7.8 $0.1 
Deferred Income Tax Expense (Benefit)  
Federal (b)
$(8.3)$(8.6)
State2.14.8
Investment Tax Credit Amortization(0.1)(0.2)
Total Deferred Income Tax Benefit$(6.3)$(4.0)
Total Income Tax Expense (Benefit)$1.5 $(3.9)
(a)For the three months ended March 31, 2022, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of certain tax legislation. For the three months ended March 31, 2023, the federal current tax expense was partially offset by production tax credits.
(b)For the three months ended March 31, 2023 and 2022, the federal income tax benefit is primarily due to production tax credits.

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter.
NOTE 8. INCOME TAX EXPENSE (Continued)

Three Months Ended
Reconciliation of Taxes from Federal StatutoryMarch 31
Rate to Total Income Tax Expense20232022
Millions  
Income Before Income Taxes$39.1 $42.6 
Statutory Federal Income Tax Rate21 %21 %
Income Taxes Computed at Statutory Federal Rate$8.2 $8.9 
Increase (Decrease) in Income Tax Due to:
State Income Taxes (Credit) – Net of Federal Income Tax Benefit3.4 3.9 
Production Tax Credits (a)
(10.4)(17.6)
Investment Tax Credits (a)
(2.2)— 
Regulatory Differences – Excess Deferred Tax(2.8)(3.8)
Non-Controlling Interest in Subsidiaries3.8 3.8 
Other1.5 0.9 
Total Income Tax Expense (Benefit)$1.5 $(3.9)
(a)For the three months ended March 31, 2023, the credits are presented net of any estimated discount on the sale of certain credits.

For the three months ended March 31, 2023, the effective tax rate was an expense of 3.8 percent (benefit of 9.2 percent for the three months ended March 31, 2022). The effective tax rate for 2023 and 2022 was primarily impacted by production tax credits.

Uncertain Tax Positions. As of March 31, 2023, we had gross unrecognized tax benefits of $1.1 million ($1.3 million as of December 31, 2022). Of the total gross unrecognized tax benefits, $0.6 million represents the amount of unrecognized tax benefits included on the Consolidated Balance Sheet that, if recognized, would favorably impact the effective income tax rate. The unrecognized tax benefit amounts have been presented as an increase to the net deferred tax liability on the Consolidated Balance Sheet.

ALLETE and its subsidiaries file a consolidated federal income tax return as well as combined and separate state income tax returns in various jurisdictions. The examination by the state of Wisconsin for the tax years 2018 through 2020 has been closed with no findings. ALLETE has no open federal or state audits, and is no longer subject to federal examination for years before 2019, or state examination for years before 2018. Additionally, the statute of limitations related to the federal tax credit carryforwards will remain open until those credits are utilized in subsequent returns.