Income Taxes

6 Months Ended

Jun. 30, 2025

INCOME TAXES

AES Ohio's provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective combined state and federal income tax rates were as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2025		2024		2025		2024
Effective combined state and federal income tax rates	42.1	%	20.1	%	26.0	%	19.9	%

The year-to-date rate is different from the combined federal and state statutory rate of 22.4% primarily due to the amortization of a municipal tax shortage, partially offset by the flowthrough of a net tax benefit related to the reversal of excess deferred taxes.

AES Ohio's income tax expense for the six months ended June 30, 2025 was calculated using the estimated annual effective income tax rate for 2025 of 25.8% on ordinary income. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income or loss. Starting in the third quarter of 2025, the annual effective tax rate is expected to increase due to the flowthrough tax expense associated with the PUCO Order on the Tax Savings Credit Rider issued on July 9, 2025.

AES files federal and state income tax returns, which consolidate AES Ohio. Under a tax sharing agreement with Ohio Investments, AES Ohio is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

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