CMS ENERGY CORP

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations:

1 In June 2025, state deferred tax balances were increased by $12 million to reflect a change in Illinois tax law that establishes nexus for Consumers. The policy change is effective for tax years beginning January 1, 2026.

2 The change in unrecognized tax benefits was primarily associated with Consumers’ state income tax claim.

State Income Tax Claim: In February 2025, CMS Energy received an adverse ruling from the Michigan Tax Tribunal regarding the methodology of state apportionment for Consumers’ electricity sales to MISO. In March 2025, CMS Energy filed an appeal with the Michigan Court of Appeals. The Court issued an opinion in the appeal in February 2026, affirming the Michigan Tax Tribunal’s ruling. In June 2026, CMS Energy filed a request for leave to appeal the Michigan Court of Appeals’ decision to the Michigan Supreme Court. CMS Energy is currently awaiting the Court’s decision on whether to grant review.

CMS Energy and Consumers evaluated and increased their uncertain tax positions associated with this matter, recognizing a $19 million increase to income tax expense during 2026. While CMS Energy and Consumers are confident in the merits of their position, if the appeal to the Michigan Supreme Court was unsuccessful, the companies would be required to revise the estimated value of their state deferred tax liabilities, which could result in a material impact to their results of operations.