ALLIANT ENERGY CORP

NOTE 12. INCOME TAXES

Income Tax Expense (Benefit) - The components of “Income tax expense (benefit)” in the income statements were as follows (in millions):

Income Tax Rates -The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income before income taxes.

Deferred Tax Assets and Liabilities - The deferred tax assets and liabilities included on the balance sheets at December 31 arise from the following temporary differences (in millions):

Carryforwards -At December 31, 2023, carryforwards and expiration dates were estimated as follows (in millions):

Valuation Allowances - Refer to Note 1(c) for discussion of valuation allowances recorded in 2023 related to the expected transfer of renewable tax credits to other corporate taxpayers.

Uncertain Tax Positions -At December 31, 2023, 2022 and 2021, there were no uncertain tax positions or penalties accrued related to uncertain tax positions. As of December 31, 2023, no material changes to unrecognized tax benefits are expected during the next 12 months.

Open tax years -Tax years that remain subject to the statute of limitations in the major jurisdictions for each of Alliant Energy, IPL and WPL are as follows:

(a)The 2020 and 2021 federal tax returns are effectively settled as a result of participation in the IRS Compliance Assurance Program, which allows Alliant Energy and the IRS to work together to resolve issues related to Alliant Energy’s current tax year before filing its federal income tax return. The statute of limitations for these federal tax returns expires three years from each filing date.

(b)The statute of limitations for these Iowa tax returns expires three years from each filing date.

(c)The statute of limitations for these Wisconsin combined tax returns expires four years from each filing date.

Iowa Tax Reform -In 2018, Iowa tax reform was enacted, resulting in a reduction in the Iowa income tax rate from 12% to 9.8%, effective January 1, 2021, and the elimination of the deduction for federal income taxes, effective January 1, 2022, for taxes related to 2020 and prior.

In March 2022, additional Iowa tax reform was enacted. Annually, and by each November 1, the Iowa Department of Revenue will establish corporate income tax rates for the next tax year based on net corporate income tax receipts for the prior tax year, and reduce such rates if certain state income tax revenue triggers are satisfied. These corporate income tax rate reductions are currently expected to occur over a period of several years, with a target corporate income tax rate of 5.5%, compared to the 9.8% Iowa corporate income tax rate in effect at the time the Iowa tax reform was enacted. In September 2022 and September 2023, the Iowa Department of Revenue announced an Iowa corporate income tax rate of 8.4% effective January 1, 2023, and 7.1% effective January 1, 2024, respectively. Deferred tax assets and liabilities are measured at the enacted tax rate expected to be applied when temporary differences are to be realized or settled. Given the announcements of the new Iowa corporate income tax rates, Alliant Energy’s and IPL’s deferred tax liabilities were remeasured in 2022 and 2023 based upon the new rates effective January 1, 2023 and January 1, 2024, which resulted in a $77 million and $74 million reduction of Alliant Energy’s and IPL’s tax-related regulatory assets and a corresponding decrease in their deferred tax liabilities in 2022 and 2023, respectively. The reduction in tax-related regulatory assets is expected to provide cost benefits to IPL’s customers in the future. Alliant Energy parent company’s deferred tax assets were remeasured based upon the new rates effective January 1, 2023 and January 1, 2024, which resulted in charges of $8 million and $10 million recorded to income tax expense in Alliant Energy’s income statement and an increase in deferred income tax liabilities on Alliant Energy’s balance sheets in 2022 and 2023, respectively. Alliant Energy is currently unable to predict with certainty the timing or amount of any future rate reductions.