Evergy, Inc.EVRG
Evergy, Inc. Income Taxes Disclosure
TAXES
(a ) State income taxes in Missouri and Kansas make up the majority (greater than 50%) of the tax effect in this category.
(a ) State income taxes in Missouri and Kansas make up the majority (greater than 50%) of the tax effect in this category.
(a ) State income taxes in Missouri and Kansas make up the majority (greater than 50%) of the tax effect in this category.
Components of income tax expense are detailed in the following tables.
| Evergy | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current income taxes | (millions) | ||||||||||||||||
| Federal | $ | 1.8 | $ | 30.9 | $ | 25.3 | |||||||||||
| State | 7.2 | 7.7 | 6.9 | ||||||||||||||
| Total | 9.0 | 38.6 | 32.2 | ||||||||||||||
| Deferred income taxes | |||||||||||||||||
| Federal | 52.4 | 30.0 | 10.2 | ||||||||||||||
| State | (24.5) | (31.4) | (21.7) | ||||||||||||||
| Total | 27.9 | (1.4) | (11.5) | ||||||||||||||
| Investment tax credit | |||||||||||||||||
| Deferral | — | — | 2.2 | ||||||||||||||
| Amortization | (7.0) | (7.2) | (7.3) | ||||||||||||||
| Total | (7.0) | (7.2) | (5.1) | ||||||||||||||
| Income tax expense | $ | 29.9 | $ | 30.0 | $ | 15.6 | |||||||||||
| Evergy Kansas Central | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current income taxes | (millions) | ||||||||||||||||
| Federal | $ | 27.0 | $ | 6.2 | $ | 27.8 | |||||||||||
| State | 7.2 | 4.7 | 4.7 | ||||||||||||||
| Total | 34.2 | 10.9 | 32.5 | ||||||||||||||
| Deferred income taxes | |||||||||||||||||
| Federal | (5.9) | 16.4 | (29.3) | ||||||||||||||
| State | (8.3) | (11.3) | (7.4) | ||||||||||||||
| Total | (14.2) | 5.1 | (36.7) | ||||||||||||||
| Investment tax credit | |||||||||||||||||
| Deferral | — | — | 2.2 | ||||||||||||||
| Amortization | (3.7) | (3.8) | (3.9) | ||||||||||||||
| Total | (3.7) | (3.8) | (1.7) | ||||||||||||||
| Income tax expense (benefit) | $ | 16.3 | $ | 12.2 | $ | (5.9) | |||||||||||
| Evergy Metro | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current income taxes | (millions) | ||||||||||||||||
| Federal | $ | 18.3 | $ | 37.7 | $ | 13.2 | |||||||||||
| State | 1.5 | 3.6 | 3.7 | ||||||||||||||
| Total | 19.8 | 41.3 | 16.9 | ||||||||||||||
| Deferred income taxes | |||||||||||||||||
| Federal | 38.3 | 15.8 | 33.6 | ||||||||||||||
| State | (10.7) | (13.0) | (7.8) | ||||||||||||||
| Total | 27.6 | 2.8 | 25.8 | ||||||||||||||
| Investment tax credit amortization | (3.2) | (3.2) | (3.5) | ||||||||||||||
| Income tax expense | $ | 44.2 | $ | 40.9 | $ | 39.2 | |||||||||||
Effective Income Tax Rates
Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
| Evergy | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| (millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Federal statutory income tax | $ | 188.5 | 21.0 | % | $ | 192.3 | 21.0 | % | $ | 159.4 | 21.0 | % | |||||||||||||||||||||||
| State and local income taxes | |||||||||||||||||||||||||||||||||||
State income taxes(a) | 12.1 | 1.4 | % | 7.1 | 0.8 | % | 5.2 | 0.7 | % | ||||||||||||||||||||||||||
| Amortization of state excess deferred income taxes | (27.2) | (3.0) | % | (27.2) | (3.0) | % | (16.1) | (2.1) | % | ||||||||||||||||||||||||||
| Tax Credits | |||||||||||||||||||||||||||||||||||
| Energy-related tax credits | (57.5) | (6.4) | % | (59.8) | (6.5) | % | (44.3) | (5.8) | % | ||||||||||||||||||||||||||
| Other tax credits | (2.2) | (0.2) | % | (4.1) | (0.5) | % | (3.1) | (0.4) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Corporate-owned life insurance | (10.9) | (1.2) | % | (11.9) | (1.3) | % | (14.2) | (1.9) | % | ||||||||||||||||||||||||||
| Other permanent differences | (2.9) | (0.3) | % | (3.3) | (0.4) | % | (2.1) | (0.3) | % | ||||||||||||||||||||||||||
| Effects of ratemaking | |||||||||||||||||||||||||||||||||||
| Amortization of investment tax credits | (5.3) | (0.6) | % | (5.4) | (0.6) | % | (5.6) | (0.7) | % | ||||||||||||||||||||||||||
| Amortization of federal excess deferred income taxes | (61.2) | (6.8) | % | (59.9) | (6.5) | % | (62.1) | (8.2) | % | ||||||||||||||||||||||||||
| Flow through for plant related differences | 1.0 | 0.1 | % | 5.2 | 0.6 | % | 1.5 | 0.2 | % | ||||||||||||||||||||||||||
| Other adjustments | (4.5) | (0.7) | % | (3.0) | (0.3) | % | (3.0) | (0.5) | % | ||||||||||||||||||||||||||
| Income tax expense and effective income tax rate | $ | 29.9 | 3.3 | % | $ | 30.0 | 3.3 | % | $ | 15.6 | 2.0 | % | |||||||||||||||||||||||
| Evergy Kansas Central | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| (millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Federal statutory income tax | $ | 121.7 | 21.0 | % | $ | 121.2 | 21.0 | % | $ | 79.5 | 21.0 | % | |||||||||||||||||||||||
| State and local income taxes | |||||||||||||||||||||||||||||||||||
State income taxes(a) | 7.7 | 1.3 | % | 3.4 | 0.6 | % | 1.5 | 0.4 | % | ||||||||||||||||||||||||||
| Amortization of state excess deferred income taxes | (9.9) | (1.7) | % | (10.0) | (1.7) | % | (2.8) | (0.7) | % | ||||||||||||||||||||||||||
| Tax Credits | |||||||||||||||||||||||||||||||||||
| Energy-related tax credits | (57.0) | (9.8) | % | (59.4) | (10.3) | % | (43.7) | (11.5) | % | ||||||||||||||||||||||||||
| Other tax credits | (0.7) | (0.1) | % | (0.7) | (0.1) | % | (0.7) | (0.2) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Corporate-owned life insurance | (10.4) | (1.8) | % | (11.4) | (2.0) | % | (13.7) | (3.6) | % | ||||||||||||||||||||||||||
| Other permanent differences | (4.3) | (0.7) | % | (4.4) | (0.8) | % | (3.9) | (1.0) | % | ||||||||||||||||||||||||||
| Effects of ratemaking | |||||||||||||||||||||||||||||||||||
| Amortization of investment tax credits | (2.0) | (0.3) | % | (2.1) | (0.4) | % | (2.2) | (0.6) | % | ||||||||||||||||||||||||||
| Amortization of federal excess deferred income taxes | (26.2) | (4.5) | % | (22.8) | (3.9) | % | (23.5) | (6.2) | % | ||||||||||||||||||||||||||
| Flow through for plant related differences | (1.2) | (0.2) | % | 2.2 | 0.4 | % | 4.4 | 1.2 | % | ||||||||||||||||||||||||||
| Other adjustments | (1.4) | (0.4) | % | (3.8) | (0.7) | % | (0.8) | (0.4) | % | ||||||||||||||||||||||||||
| Income tax expense (benefit) and effective income tax rate | $ | 16.3 | 2.8 | % | $ | 12.2 | 2.1 | % | $ | (5.9) | (1.6) | % | |||||||||||||||||||||||
| Evergy Metro | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| (millions, except percentages) | |||||||||||||||||||||||||||||||||||
| Federal statutory income tax | $ | 76.6 | 21.0 | % | $ | 76.7 | 21.0 | % | $ | 78.0 | 21.0 | % | |||||||||||||||||||||||
| State and local income taxes | |||||||||||||||||||||||||||||||||||
State income taxes(a) | 4.0 | 1.1 | % | 3.8 | 1.0 | % | 4.2 | 1.1 | % | ||||||||||||||||||||||||||
| Amortization of state excess deferred income taxes | (11.2) | (3.1) | % | (11.2) | (3.1) | % | (7.5) | (2.0) | % | ||||||||||||||||||||||||||
| Tax Credits | |||||||||||||||||||||||||||||||||||
| Other tax credits | (1.8) | (0.5) | % | (3.6) | (1.0) | % | (2.7) | (0.7) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Other permanent differences | 1.1 | 0.3 | % | 0.3 | 0.1 | % | 1.4 | 0.4 | % | ||||||||||||||||||||||||||
| Effects of ratemaking | |||||||||||||||||||||||||||||||||||
| Amortization of investment tax credits | (3.2) | (0.9) | % | (3.2) | (0.9) | % | (3.5) | (0.9) | % | ||||||||||||||||||||||||||
| Amortization of federal excess deferred income taxes | (22.0) | (6.0) | % | (23.3) | (6.4) | % | (30.1) | (8.1) | % | ||||||||||||||||||||||||||
| Flow through for plant related differences | 2.0 | 0.6 | % | 2.7 | 0.7 | % | 1.9 | 0.5 | % | ||||||||||||||||||||||||||
| Other adjustments | (1.3) | (0.4) | % | (1.3) | (0.2) | % | (2.5) | (0.7) | % | ||||||||||||||||||||||||||
| Income tax expense and effective income tax rate | $ | 44.2 | 12.1 | % | $ | 40.9 | 11.2 | % | $ | 39.2 | 10.6 | % | |||||||||||||||||||||||
Income Taxes Paid
Income taxes paid, net of refunds received, disaggregated between federal and state are detailed in the following tables.
| Evergy | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
| Federal income taxes | $ | 5.9 | $ | 31.0 | $ | 28.7 | |||||||||||
| State income taxes | |||||||||||||||||
| Missouri | — | 7.0 | 10.5 | ||||||||||||||
| Kansas | — | (0.1) | (5.0) | ||||||||||||||
| Other states | 0.2 | 0.1 | 0.2 | ||||||||||||||
| Total state income tax paid, net of refunds | 0.2 | 7.0 | 5.7 | ||||||||||||||
| Total income taxes paid, net of refunds | $ | 6.1 | $ | 38.0 | $ | 34.4 | |||||||||||
| Evergy Kansas Central | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
| Federal income taxes | $ | 9.0 | $ | 7.0 | $ | 48.5 | |||||||||||
| State income taxes | |||||||||||||||||
| Missouri | 1.4 | 3.6 | 5.8 | ||||||||||||||
| Kansas | (1.9) | — | — | ||||||||||||||
| Other states | 0.1 | 0.1 | 0.1 | ||||||||||||||
| Total state income tax paid, net of refunds | (0.4) | 3.7 | 5.9 | ||||||||||||||
| Total income taxes paid, net of refunds | $ | 8.6 | $ | 10.7 | $ | 54.4 | |||||||||||
| Evergy Metro | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
| Federal income taxes | $ | 29.8 | $ | 34.9 | $ | 6.4 | |||||||||||
| State income taxes | |||||||||||||||||
| Missouri | 0.1 | 3.6 | 2.7 | ||||||||||||||
| Kansas | (0.3) | (0.1) | 0.5 | ||||||||||||||
| Other states | 0.1 | 0.1 | 0.2 | ||||||||||||||
| Total state income tax paid, net of refunds | (0.1) | 3.6 | 3.4 | ||||||||||||||
| Total income taxes paid, net of refunds | $ | 29.7 | $ | 38.5 | $ | 9.8 | |||||||||||
Deferred Income Taxes
The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the consolidated balance sheets is in the following table.
| December 31 | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Evergy | Evergy Kansas Central | Evergy Metro | Evergy | Evergy Kansas Central | Evergy Metro | ||||||||||||||||||||||||||||||
| Deferred tax assets: | (millions) | ||||||||||||||||||||||||||||||||||
| Tax credit carryforward | $ | 572.8 | $ | 412.4 | $ | 159.1 | $ | 393.2 | $ | 296.5 | $ | 95.3 | |||||||||||||||||||||||
| Income taxes refundable to customers, net | 323.3 | 169.1 | 126.6 | 308.2 | 160.5 | 115.7 | |||||||||||||||||||||||||||||
| Deferred employee benefit costs | 92.9 | 37.7 | 59.2 | 98.4 | 42.4 | 61.6 | |||||||||||||||||||||||||||||
| Net operating loss carryforward | 4.6 | — | — | 4.4 | — | — | |||||||||||||||||||||||||||||
| Deferred state income taxes | 123.5 | 92.1 | 29.5 | 132.2 | 95.7 | 32.8 | |||||||||||||||||||||||||||||
| Accrued liabilities | 214.8 | 101.2 | 81.2 | 198.0 | 92.6 | 73.8 | |||||||||||||||||||||||||||||
| Other regulatory liabilities | 69.5 | 54.0 | 8.5 | 92.4 | 62.8 | 8.0 | |||||||||||||||||||||||||||||
| Other | 94.9 | 43.9 | 23.8 | 99.6 | 46.4 | 25.8 | |||||||||||||||||||||||||||||
| Total deferred tax assets before valuation allowance | 1,496.3 | 910.4 | 487.9 | 1,326.4 | 796.9 | 413.0 | |||||||||||||||||||||||||||||
| Valuation allowances | (7.2) | (2.7) | — | (6.9) | (2.7) | — | |||||||||||||||||||||||||||||
| Total deferred tax assets, net | 1,489.1 | 907.7 | 487.9 | 1,319.5 | 794.2 | 413.0 | |||||||||||||||||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||||||||||||||||||||
| Plant-related | (2,974.9) | (1,463.3) | (1,079.5) | (2,844.9) | (1,407.6) | (1,030.5) | |||||||||||||||||||||||||||||
| Deferred employee benefit costs | (0.6) | — | — | (0.5) | — | — | |||||||||||||||||||||||||||||
| ARO regulatory assets | (194.0) | (85.3) | (75.5) | (177.2) | (76.4) | (68.4) | |||||||||||||||||||||||||||||
| Acquisition premium | (31.0) | (31.0) | — | (34.2) | (34.2) | — | |||||||||||||||||||||||||||||
| Other regulatory assets | (227.6) | (38.7) | (55.9) | (200.6) | (31.3) | (39.5) | |||||||||||||||||||||||||||||
| Other | (81.7) | (50.3) | (20.8) | (97.8) | (50.3) | (29.9) | |||||||||||||||||||||||||||||
| Total deferred tax liabilities | (3,509.8) | (1,668.6) | (1,231.7) | (3,355.2) | (1,599.8) | (1,168.3) | |||||||||||||||||||||||||||||
| Net deferred income tax liabilities | $ | (2,020.7) | $ | (760.9) | $ | (743.8) | $ | (2,035.7) | $ | (805.6) | $ | (755.3) | |||||||||||||||||||||||
Tax Credit Carryforwards
As of December 31, 2025 and 2024, Evergy had $567.9 million and $388.3 million, respectively, of federal general business income tax credit carryforwards. As of December 31, 2025 and 2024, Evergy Kansas Central had $407.5 million and $291.6 million, respectively, of federal general business income tax credit carryforwards. As of December 31, 2025 and 2024, Evergy Metro had $159.1 million and $95.3 million, respectively, of federal general business income tax credit carryforwards. The carryforwards for Evergy, Evergy Kansas Central and Evergy Metro relate primarily to PTCs and research and development tax credits and expire in the years 2026 to 2045.
The Evergy Companies' federal general business income tax credit carryforwards include PTCs related to the generation of electricity from nuclear energy. As of December 31, 2025, Evergy, Evergy Kansas Central and Evergy Metro had $263.1 million, $130.5 million and $132.6 million, respectively, of tax credits from the generation of electricity from nuclear energy included in the production tax credits carryforwards. Beginning in 2024, nuclear units, including Wolf Creek, became eligible for a production tax credit through 2032. The credit is for $15.00 per MWh and is subject to a phase-out when gross receipts from the facility are between $25.00 per MWh and $43.75 per MWh. The credit may be used to offset Evergy's income tax liability or be transferred to an unrelated third party. The Evergy Companies have estimated the credit based on the existing Internal Revenue Service (IRS) regulations. The IRS may provide guidance regarding the type of revenue to be included in the computation of gross receipts in 2026 which may significantly reduce the amount of nuclear production tax credits available to Evergy. The Evergy Companies have recorded a regulatory liability for these tax credits as the benefits are expected to be refunded to customers as a reduction to revenue in future regulatory proceedings.
The year of origin of Evergy's, Evergy Kansas Central's and Evergy Metro's related tax benefit amounts for federal tax credit carryforwards as of December 31, 2025, are detailed in the following table.
| Amount of Benefit | |||||||||||||||||||||||
| Year of Origin | Evergy | Evergy Kansas Central | Evergy Metro | ||||||||||||||||||||
| (millions) | |||||||||||||||||||||||
| 2007 | $ | 0.1 | $ | — | $ | — | |||||||||||||||||
| 2019 | 28.5 | 25.1 | 3.3 | ||||||||||||||||||||
| 2020 | 35.9 | 28.5 | 7.3 | ||||||||||||||||||||
| 2021 | 31.9 | 28.1 | 3.6 | ||||||||||||||||||||
| 2022 | 34.6 | 31.7 | 2.6 | ||||||||||||||||||||
| 2023 | 49.8 | 45.3 | 4.3 | ||||||||||||||||||||
| 2024 | 196.6 | 125.7 | 70.8 | ||||||||||||||||||||
| 2025 | 190.5 | 123.1 | 67.2 | ||||||||||||||||||||
| $ | 567.9 | $ | 407.5 | $ | 159.1 | ||||||||||||||||||
As of December 31, 2025 and 2024, Evergy and Evergy Kansas Central had $4.9 million of tax benefits related to state income tax credit carryforwards. The state income tax credits relate primarily to the Kansas high performance incentive program and expire in the years 2038 to 2039. Due to the elimination of the Kansas corporate income tax for utilities, Evergy and Evergy Kansas Central expect a portion of these state tax credit carryforwards to expire unutilized and have provided a valuation allowance against $2.7 million of the state tax benefits.
Net Operating Loss (NOL) Carryforwards
As of December 31, 2025 and 2024, Evergy had deferred tax benefits of $4.6 million and $4.4 million related to state NOLs, respectively. The state NOL carryforwards expire in years 2026 to 2045. Evergy does not expect to utilize $4.5 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $4.5 million of state tax benefits.
Valuation Allowances
Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment threshold. This assessment takes into consideration tax planning strategies within Evergy's control. As a result of this assessment, Evergy has established a partial valuation allowance for state tax NOL carryforwards and tax credit carryforwards. During 2025, $0.3 million of tax expense was recorded in continuing operations primarily related to state NOLs that expired. The tax expense was offset by the reduction in related deferred tax assets.
Uncertain Tax Positions
Evergy is considered open to U.S. federal examination for years after 2009 due to the carryforward of NOLs and general business income tax credits. With few exceptions, Evergy is no longer subject to state and local tax examinations by tax authorities for years before 2021. As of December 31, 2025, Evergy is currently under IRS audit for the 2023 tax year.About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.