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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income before income taxes for the years ended December 31, 2024, 2023 and 2022 consists entirely of domestic earnings. The provision for income taxes charged to income for the years ended December 31, 2024, 2023 and 2022 consisted of the following:
(in thousands) | 2024 |  | 2023 |  | 2022
Current |  |  |  |  |
Federal Income Taxes | $ | 36,238 |  |  | $ | 41,253 |  |  | $ | 31,949 |
State Income Taxes | 6,533 |  |  | 15,126 |  |  | 9,568 |
Deferred |  |  |  |  |
Federal Income Taxes | 13,078 |  |  | 9,832 |  |  | 22,480 |
State Income Taxes | 9,979 |  |  | 3,676 |  |  | 9,943 |
Tax Credits |  |  |  |  |
North Dakota Wind Tax Credit Amortization, Net of Federal Tax | (586) |  |  | (586) |  |  | (586) |
Investment Tax Credit Amortization | (12) |  |  | (3) |  |  | (3) |
Total | $ | 65,230 |  |  | $ | 69,298 |  |  | $ | 73,351 |
The reconciliation of the statutory federal income tax rate to our effective tax rate for each of the years ended December 31, 2024, 2023 and 2022 is as follows:
| 2024 |  | 2023 |  | 2022
Income Taxes at Federal Statutory Rate | $ | 77,047 |  | 21.0 | % |  | $ | 76,332 |  | 21.0 | % |  | $ | 75,082 |  | 21.0 | %
Increases (Decreases) in Tax from: |  |  |  |  |  |  |  |
State Taxes on Income, Net of Federal Tax | 14,360 |  | 3.9 |  |  | 14,429 |  | 4.0 |  |  | 15,049 |  | 4.2 |
Production Tax Credits (PTCs) | (20,106) |  | (5.5) |  |  | (17,394) |  | (4.8) |  |  | (14,985) |  | (4.2) |
Amortization of Excess Deferred Income Taxes | (2,788) |  | (0.8) |  |  | (2,205) |  | (0.6) |  |  | (1,625) |  | (0.5) |
North Dakota Wind Tax Credit Amortization, Net of Federal Tax | (586) |  | (0.2) |  |  | (586) |  | (0.2) |  |  | (586) |  | (0.2) |
Other, Net | (2,697) |  | (0.6) |  |  | (1,278) |  | (0.3) |  |  | 416 |  | 0.2 |
Income Taxes at Effective Tax Rate | $ | 65,230 |  | 17.8 | % |  | $ | 69,298 |  | 19.1 | % |  | $ | 73,351 |  | 20.5 | %
PTCs, North Dakota wind tax credits and excess deferred income taxes arising from 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, 2024 and 2023:
(in thousands) | 2024 |  | 2023
Deferred Tax Assets |  |  |
Employee Benefits | $ | 37,456 |  |  | $ | 39,959 |
Regulatory Liabilities | 52,664 |  |  | 56,479 |
Tax Credit Carryforwards | 18,268 |  |  | 21,836 |
Cost of Removal | 35,374 |  |  | 32,993 |
Asset Retirement Obligations | 10,948 |  |  | 9,494 |
Net Operating Loss Carryforward | 2,289 |  |  | 2,336 |
Other | 19,449 |  |  | 11,310 |
Total Deferred Tax Assets | $ | 176,448 |  |  | $ | 174,407 |
Deferred Tax Liabilities |  |  |
Differences Related to Property | $ | (375,120) |  |  | $ | (347,885) |
Retirement Benefits Regulatory Asset | (22,892) |  |  | (22,458) |
Pension Expense | (26,034) |  |  | (24,875) |
Other | (20,147) |  |  | (16,462) |
Total Deferred Tax Liabilities | (444,193) |  |  | (411,680) |
Deferred Income Taxes | $ | (267,745) |  |  | $ | (237,273) |
As of December 31, 2024, we had net operating loss carryforwards for state tax purposes totaling $2.3 million that expire between 2029 and 2037, and state tax credits totaling $18.3 million which expire between 2040 and 2043. The following table summarizes the activity for unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022:
(in thousands) | 2024 |  | 2023 |  | 2022
Balance on January 1 | $ | 1,489 |  |  | $ | 923 |  |  | $ | 827 |
Increases (Decreases) for tax positions taken during a prior period | (189) |  |  | 596 |  |  | 44 |
Increases for tax positions taken during the current period | 188 |  |  | 163 |  |  | 260 |
Decreases due to settlements with taxing authorities | — |  |  | — |  |  | — |
Decreases as a result of a lapse of applicable statutes of limitations | (363) |  |  | (193) |  |  | (208) |
Balance on December 31 | $ | 1,125 |  |  | $ | 1,489 |  |  | $ | 923 |
The balance of unrecognized tax benefits as of December 31, 2024 would reduce our effective tax rate if recognized. The total amount of unrecognized tax benefits as of December 31, 2024 is not expected to change significantly within the next 12 months. The Company and its subsidiaries file a consolidated U.S. federal income tax return and various state income tax returns. As of December 31, 2024, with limited exceptions, we are no longer subject to examinations by taxing authorities for tax years prior to 2021 for federal and North Dakota income taxes and prior to 2020 for Minnesota state income taxes.

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