v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Taxes [Line Items]  
Income Taxes Income Taxes
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:
Six Months Ended June 3020262025
CMS Energy, including Consumers
Income tax expense at statutory rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1
5.5 7.2 
Tax credits
Renewable energy tax credits(5.5)(5.7)
Other(0.6)(0.2)
Nontaxable or nondeductible items0.2 0.2 
Changes in unrecognized tax benefits2
3.9 0.5 
Other adjustments
Taxes attributable to noncontrolling interests4.3 1.3 
TCJA excess deferred taxes(3.3)(3.6)
Property differences(1.4)(0.5)
Other, net(0.1)0.2 
Effective tax rate24.0 %20.4 %
Consumers
Income tax expense at statutory rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1
4.6 6.7 
Tax credits
Renewable energy tax credits(4.3)(3.3)
Other(0.5)(0.4)
Nontaxable or nondeductible items0.2 0.2 
Changes in unrecognized tax benefits2
3.0 0.4 
Other adjustments
TCJA excess deferred taxes(2.5)(3.0)
Property differences(1.1)(0.3)
Other, net0.2 (0.3)
Effective tax rate20.6 %21.0 %
1    In June 2025, state deferred tax balances were increased by $12 million to reflect a change in Illinois tax policy 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 in regards to 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.
Consumers Energy Company  
Income Taxes [Line Items]  
Income Taxes Income Taxes
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:
Six Months Ended June 3020262025
CMS Energy, including Consumers
Income tax expense at statutory rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1
5.5 7.2 
Tax credits
Renewable energy tax credits(5.5)(5.7)
Other(0.6)(0.2)
Nontaxable or nondeductible items0.2 0.2 
Changes in unrecognized tax benefits2
3.9 0.5 
Other adjustments
Taxes attributable to noncontrolling interests4.3 1.3 
TCJA excess deferred taxes(3.3)(3.6)
Property differences(1.4)(0.5)
Other, net(0.1)0.2 
Effective tax rate24.0 %20.4 %
Consumers
Income tax expense at statutory rate21.0 %21.0 %
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1
4.6 6.7 
Tax credits
Renewable energy tax credits(4.3)(3.3)
Other(0.5)(0.4)
Nontaxable or nondeductible items0.2 0.2 
Changes in unrecognized tax benefits2
3.0 0.4 
Other adjustments
TCJA excess deferred taxes(2.5)(3.0)
Property differences(1.1)(0.3)
Other, net0.2 (0.3)
Effective tax rate20.6 %21.0 %
1    In June 2025, state deferred tax balances were increased by $12 million to reflect a change in Illinois tax policy 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 in regards to 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.