v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
5. Income Taxes

Reconciliations of income tax expense (benefit) for the periods ended June 30 are as follows.
(PPL)
Three MonthsSix Months
2025202420252024
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%$48 $50 $157 $132 
Increase (decrease) due to:    
State income taxes, net of federal income tax benefit8 11 28 28 
Valuation allowance adjustments2 2 6 5 
Amortization of investment tax credit including deferred taxes on basis adjustment(1)— (4)(2)
Utility rate-making tax adjustments (a)(5)(5)(14)(10)
Amortization of excess deferred federal and state income taxes (6)(7)(21)(20)
Other1 (1)(3)(2)
Total increase (decrease)(1)— (8)(1)
Total income tax expense (benefit)$47 $50 $149 $131 

(a)     Primarily consists of tax impacts of AFUDC equity and related depreciation across PPL's regulated utility subsidiaries and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.

(PPL Electric)  
Three MonthsSix Months
2025202420252024
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%$38 $41 $88 $83 
Increase (decrease) due to:    
State income taxes, net of federal income tax benefit11 13 27 26 
Utility rate-making tax adjustments (a)(6)(6)(12)(10)
Amortization of excess deferred federal and state income taxes(2)(3)(5)(5)
Other2 1 (1)— 
Total increase (decrease)5 5 9 11 
Total income tax expense (benefit) $43 $46 $97 $94 

(a)     Primarily consists of tax impacts of AFUDC equity and related depreciation and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.

(LG&E)  
 Three MonthsSix Months
 2025202420252024
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%$15 $17 $42 $41 
Increase (decrease) due to:    
State income taxes, net of federal income tax benefit3 3 8 7 
Amortization of excess deferred federal and state income taxes(3)(3)(7)(6)
Other(1)— (3)(1)
Total increase (decrease)(1)— (2)— 
Total income tax expense (benefit)$14 $17 $40 $41 
(KU)  
 Three MonthsSix Months
 2025202420252024
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%$20 $20 $53 $48 
Increase (decrease) due to:    
State income taxes, net of federal income tax benefit4 4 10 9 
Amortization of excess deferred federal and state income taxes(4)(4)(9)(9)
Other(1)(1)(4)(2)
Total increase (decrease)(1)(1)(3)(2)
Total income tax expense (benefit)$19 $19 $50 $46 

Other

IRS Revenue Procedure 2023-15 (PPL and LG&E)

On April 14, 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether expenses to repair, maintain, replace, or improve natural gas transmission and distribution property must be capitalized for tax purposes. PPL and LG&E reviewed the revenue procedure and determined that there are no material impacts to their financial statements.

One Big Beautiful Bill Act (All Registrants)

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act. The Registrants are currently reviewing the law to assess any material impacts to the financial statements.

Additionally, on July 7, 2025, President Trump issued an Executive Order directing the Treasury to take action to strictly enforce the termination of clean electricity tax credits under IRC Sections 45Y and 48E for wind and solar. This may include stricter regulations or other measures concerning what qualifies as having "commenced construction". The date that a wind or solar project commences construction is critical in the determination of whether such project will be eligible for the currently available tax credits. PPL is actively monitoring Treasury guidance and expects to take all commercially reasonable measures to preserve the eligibility of the Kentucky projects for the existing tax credits provided for under the IRA.