NEXTERA ENERGY INCNEE
NEXTERA ENERGY INC Income Taxes Disclosure
Income Taxes
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Effective January 1, 2025, NEE and FPL adopted an accounting standards update that provides guidance for reporting on income taxes and requires additional disclosures related to cash paid (received) for income taxes – net and the effective income tax rate. NEE and FPL adopted the updated standard for income taxes using the full retrospective approach, which changed the presentation of certain information below.
The components of income taxes are as follows:
| NEE | FPL | ||||||||||||||||||||||||||||||||||
| Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| (millions) | |||||||||||||||||||||||||||||||||||
| Federal: | |||||||||||||||||||||||||||||||||||
Current | $ | 194 | $ | 208 | $ | 507 | $ | 121 | $ | 252 | $ | 990 | |||||||||||||||||||||||
Deferred | (1,248) | (150) | 368 | 288 | 422 | (179) | |||||||||||||||||||||||||||||
| Total federal | (1,054) | 58 | 875 | 409 | 674 | 811 | |||||||||||||||||||||||||||||
| State: | |||||||||||||||||||||||||||||||||||
| Current | 78 | 126 | 161 | 161 | 116 | 294 | |||||||||||||||||||||||||||||
Deferred | 174 | 155 | (30) | 149 | 180 | 18 | |||||||||||||||||||||||||||||
| Total state | 252 | 281 | 131 | 310 | 296 | 312 | |||||||||||||||||||||||||||||
| Total income taxes | $ | (802) | $ | 339 | $ | 1,006 | $ | 719 | $ | 970 | $ | 1,123 | |||||||||||||||||||||||
A reconciliation of the income tax expense (benefit) and effective income tax rates based on the statutory U.S. federal income tax rate is as follows:
| NEE | |||||||||||||||||||||||||||||||||||
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (millions, except for percentages) | |||||||||||||||||||||||||||||||||||
Income taxes at U.S. statutory rate of 21% | $ | 951 | 21.0 | % | $ | 1,268 | 21.0 | % | $ | 1,530 | 21.0 | % | |||||||||||||||||||||||
| Increases (reductions) resulting from: | |||||||||||||||||||||||||||||||||||
State income taxes – net of federal income tax benefit | 199 | 4.4(a) | 223 | 3.7(b) | 102 | 1.4(c) | |||||||||||||||||||||||||||||
Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
| Taxes attributable to noncontrolling interests | 315 | 7.0 | 260 | 4.3 | 219 | 3.0 | |||||||||||||||||||||||||||||
| Amortization of deferred regulatory credit | (159) | (3.5) | (163) | (2.7) | (182) | (2.5) | |||||||||||||||||||||||||||||
Other – net | (14) | (0.3) | (30) | (0.5) | (44) | (0.6) | |||||||||||||||||||||||||||||
Clean energy tax credits | (2,075) | (45.8) | (1,201) | (19.9) | (605) | (8.3) | |||||||||||||||||||||||||||||
Valuation allowance | 95 | 2.1 | 48 | 0.8 | 22 | 0.3 | |||||||||||||||||||||||||||||
Other adjustments – net | (114) | (2.6) | (66) | (1.1) | (36) | (0.5) | |||||||||||||||||||||||||||||
Income tax expense (benefit) and effective tax rate | $ | (802) | (17.7) | % | $ | 339 | 5.6 | % | $ | 1,006 | 13.8 | % | |||||||||||||||||||||||
______________________
(a)State taxes in Florida made up greater than 50 percent of the tax effect in this category.
(b)State taxes in Florida and Massachusetts made up greater than 50 percent of the tax effect in this category.
(c)State taxes in Florida, California, Kansas, Oklahoma, New Hampshire, Massachusetts and Virginia made up greater than 50 percent of the tax effect in this category.
FPL | |||||||||||||||||||||||||||||||||||
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (millions, except for percentages) | |||||||||||||||||||||||||||||||||||
Income taxes at U.S. statutory rate of 21% | $ | 1,204 | 21.0 | % | $ | 1,158 | 21.0 | % | $ | 1,192 | 21.0 | % | |||||||||||||||||||||||
| Increases (reductions) resulting from: | |||||||||||||||||||||||||||||||||||
State income taxes – net of federal income tax benefit(a) | 246 | 4.3 | 237 | 4.3 | 244 | 4.3 | |||||||||||||||||||||||||||||
Clean energy tax credits | (522) | (9.1) | (237) | (4.3) | (114) | (2.0) | |||||||||||||||||||||||||||||
| Amortization of deferred regulatory credit | (160) | (2.8) | (165) | (3.0) | (182) | (3.2) | |||||||||||||||||||||||||||||
Other adjustments – net | (49) | (0.9) | (23) | (0.4) | (17) | (0.3) | |||||||||||||||||||||||||||||
Income tax expense and effective tax rate | $ | 719 | 12.5 | % | $ | 970 | 17.6 | % | $ | 1,123 | 19.8 | % | |||||||||||||||||||||||
______________________
(a)State taxes in Florida made up greater than 50 percent of the tax effect in this category.
The income tax effects of temporary differences giving rise to consolidated deferred income tax liabilities and assets are as follows:
| NEE | FPL | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (millions) | |||||||||||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||||||||
| Property-related | $ | 12,374 | $ | 11,558 | $ | 10,048 | $ | 9,272 | |||||||||||||||
| Pension | 708 | 637 | 525 | 495 | |||||||||||||||||||
| Investments in partnerships and joint ventures | 2,822 | 2,534 | 3 | 3 | |||||||||||||||||||
| Other | 2,275 | 2,168 | 1,448 | 1,463 | |||||||||||||||||||
| Total deferred tax liabilities | 18,179 | 16,897 | 12,024 | 11,233 | |||||||||||||||||||
| Deferred tax assets and valuation allowance: | |||||||||||||||||||||||
| Decommissioning reserves | 323 | 307 | 346 | 331 | |||||||||||||||||||
| Net operating loss carryforwards | 278 | 233 | — | — | |||||||||||||||||||
| Tax credit carryforwards | 3,591 | 3,057 | 9 | — | |||||||||||||||||||
| ARO and accrued asset removal costs | 257 | 233 | 123 | 116 | |||||||||||||||||||
| Regulatory liabilities | 1,120 | 1,153 | 1,096 | 1,129 | |||||||||||||||||||
| Other | 791 | 652 | 295 | 219 | |||||||||||||||||||
Valuation allowance(a) | (295) | (266) | (1) | — | |||||||||||||||||||
| Net deferred tax assets | 6,065 | 5,369 | 1,868 | 1,795 | |||||||||||||||||||
| Net deferred income taxes | $ | 12,114 | $ | 11,528 | $ | 10,156 | $ | 9,438 | |||||||||||||||
______________________
(a)Reflects valuation allowances related to deferred state tax credits and state operating loss carryforwards.
Deferred tax assets and liabilities are included on the consolidated balance sheets as follows:
| NEE | FPL | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (millions) | |||||||||||||||||||||||
| Noncurrent other assets | $ | 245 | $ | 221 | $ | — | $ | — | |||||||||||||||
Deferred income taxes – noncurrent liabilities | (12,359) | (11,749) | (10,156) | (9,438) | |||||||||||||||||||
| Net deferred income taxes | $ | (12,114) | $ | (11,528) | $ | (10,156) | $ | (9,438) | |||||||||||||||
The components of NEE's deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards as of December 31, 2025 are as follows:
| Amount | Expiration Dates | ||||||||||
| (millions) | |||||||||||
| Net operating loss carryforwards: | |||||||||||
| State | $ | 259 | (a) | 2026 – 2045 | |||||||
| Foreign | 19 | (b) | 2028 – 2045 | ||||||||
| Net operating loss carryforwards | $ | 278 | |||||||||
| Tax credit carryforwards: | |||||||||||
| Federal | $ | 3,208 | 2038 – 2047 | ||||||||
| State | 376 | (c) | 2026 – 2044 | ||||||||
| Foreign | 7 | 2034 – 2045 | |||||||||
| Tax credit carryforwards | $ | 3,591 | |||||||||
______________________
(a)Includes approximately $92 million of net operating loss carryforwards with an indefinite expiration period.
(b)Includes approximately $1 million of net operating loss carryforwards with an indefinite expiration period.
(c)Includes approximately $201 million of clean energy tax credit carryforwards with an indefinite expiration period.
The components of cash paid (received) for income taxes – net are as follows:
| NEE | FPL | ||||||||||||||||||||||||||||||||||
| Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| (millions) | |||||||||||||||||||||||||||||||||||
Cash paid (received) for income taxes – net: | |||||||||||||||||||||||||||||||||||
Federal | $ | (1,264) | $ | (1,010) | $ | 280 | $ | (52) | $ | 242 | $ | 977 | |||||||||||||||||||||||
State | (11) | 250 | 41 | 89 | 398 | 4 | |||||||||||||||||||||||||||||
Total | $ | (1,275) | $ | (760) | $ | 321 | $ | 37 | $ | 640 | $ | 981 | |||||||||||||||||||||||
States that exceed 5% of total cash paid (received) for income taxes – net: | |||||||||||||||||||||||||||||||||||
Florida | (a) | $ | 176 | (a) | $ | 91 | $ | 397 | (a) | ||||||||||||||||||||||||||
(a)Jurisdiction below the threshold for the period presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 22, 2016 | |
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.