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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes for the years ended December 31, 2023, 2022 and 2021 consists entirely of domestic earnings.
The provision for income taxes charged to income for the years ended December 31, 2023, 2022 and 2021 consisted of the following:
(in thousands)202320222021
Current
Federal Income Taxes$41,253 $31,949 $6,806 
State Income Taxes15,126 9,568 939 
Deferred
Federal Income Taxes9,832 22,480 18,180 
State Income Taxes3,676 9,943 10,716 
Tax Credits
North Dakota Wind Tax Credit Amortization, Net of Federal Tax(586)(586)(586)
Investment Tax Credit Amortization(3)(3)(3)
Total$69,298 $73,351 $36,052 
The reconciliation of the statutory federal income tax rate to our effective tax rate for each of the years ended December 31, 2023, 2022 and 2021 is as follows:
202320222021
Income Taxes at Federal Statutory Rate$76,332 21.0 %$75,082 21.0 %$44,692 21.0 %
Increases (Decreases) in Tax from:
State Taxes on Income, Net of Federal Tax14,429 4.0 15,049 4.2 9,962 4.7 
Production Tax Credits (PTCs)(17,394)(4.8)(14,985)(4.2)(12,503)(5.9)
Amortization of Excess Deferred Income Taxes(2,205)(0.6)(1,625)(0.5)(4,262)(2.0)
North Dakota Wind Tax Credit Amortization, Net of Federal Tax(586)(0.2)(586)(0.2)(586)(0.3)
Other, Net(1,278)(0.3)416 0.2 (1,251)(0.6)
Income Taxes at Effective Tax Rate$69,298 19.1 %$73,351 20.5 %$36,052 16.9 %
PTCs, North Dakota wind tax credits, and excess deferred income taxes related to the federal tax rate reduction in the 2017 Tax Cuts and Jobs Act are returned to customers as a reduction of the rates they are charged and result in a reduction of operating revenues.
Deferred tax assets and liabilities were composed of the following on December 31, 2023 and 2022:
(in thousands)20232022
Deferred Tax Assets  
Employee Benefits$39,959 $39,216 
Regulatory Liabilities56,479 57,353 
Tax Credit Carryforwards
21,836 20,209 
Cost of Removal32,993 37,360 
Asset Retirement Obligations
9,494 6,557 
Net Operating Loss Carryforward
2,336 1,853 
Other11,310 5,550 
Total Deferred Tax Assets174,407 168,098 
Deferred Tax Liabilities
Differences Related to Property(347,885)(334,201)
Retirement Benefits Regulatory Asset(22,458)(22,789)
Pension Expense(24,875)(24,269)
Other(16,462)(8,141)
Total Deferred Tax Liabilities(411,680)(389,400)
Deferred Income Taxes$(237,273)$(221,302)
The following is a schedule of tax credits and tax net operating losses available as of December 31, 2023 and the respective periods of expiration:
(in thousands)Amount2024-20292030-20372038-2043
State Net Operating Losses$2,336 $211 $2,125 $— 
State Tax Credits21,836 — — 21,836 
The following table summarizes the activity for unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021:
(in thousands)202320222021
Balance on January 1$923 $827 $771 
Increases for tax positions taken during a prior period
596 44 11 
Increases for tax positions taken during the current period163 260 189 
Decreases due to settlements with taxing authorities— — — 
Decreases as a result of a lapse of applicable statutes of limitations(193)(208)(144)
Balance on December 31$1,489 $923 $827 
The balance of unrecognized tax benefits as of December 31, 2023 would reduce our effective tax rate if recognized. The total amount of unrecognized tax benefits as of December 31, 2023 is not expected to change significantly within the next 12 months. We classify interest and penalties on tax uncertainties as components of the provision for income taxes in the consolidated statements of income.
The Company and its subsidiaries file a consolidated U.S. federal income tax return and various state income tax returns. As of December 31, 2023, with limited exceptions, we are no longer subject to examinations by taxing authorities for tax years prior to 2020 for federal and North Dakota income taxes and prior to 2019 for Minnesota state income taxes.