Company: MSEX
Filing Date: 2025-07-29
Form Type: 424B5
Source: 0001104659-25-071727
Chunk: 33

Company: MIDDLESEX WATER CO
Filing Date: 2025-07-29
Form: 424B5
Chunk 33
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purchases Common Stock in open market transactions or in negotiated transactions with third parties, however, we intend to take the position
that the amount of the distribution received by a U.S. participant is equal to the purchase price of such Common Stock plus a pro rata
share of any brokerage trading fees or other related charges paid by us in connection with the Plan Agent’s purchase of the Common
Stock on behalf of the U.S. participant. The Plan currently provides that we will pay brokerage trading fees for the purchase of Common
Stock in the open market or in negotiated transactions with third parties.

As in the case of non-reinvested
cash distributions, the distributions described above will constitute taxable dividend income to U.S. participants to the extent of our
current and accumulated earnings and profits allocable to the distributions. Any excess distributions will constitute a nontaxable return
of capital which reduces the basis of the U.S. participant’s Common Stock and will be taxed as capital gain (which will be either
long-term or short-term capital gain depending upon whether the U.S. Participant has held the common shares for more than one year) to
the extent that such distributions exceed the U.S. participant’s tax basis in the U.S. participant’s Common Stock. Under
current law, subject to holding-period requirements and certain other limitations, dividends received with respect to Common Stock by
a U.S. Participant who is an individual generally will be treated as qualified dividend income that is taxable to such U.S. Participant
at preferential capital gain tax rates.

A U.S. participant’s
tax basis in the Common Stock acquired under the Plan will generally equal the total amount of distributions the U.S. participant is
treated as receiving, as described above. A U.S. participant’s holding period in the Common Stock purchased under the Plan generally
begins on the day following the date on which the Common Stock is credited to the U.S. participant’s Plan account.

Material Tax Consequences of Optional Cash Payments

The U.S. federal income tax
consequences relating to an optional cash purchase under the Plan are uncertain. The Internal Revenue Service has indicated through private
letter rulings that a U.S. participant participating in the dividend reinvestment part of the Plan and who elects to purchase shares
by optional cash payment will be treated as having received a distribution equal to the excess, if any, of the fair market value, determined
on the investment date, of the Common Stock purchased over the amount of the cash payment made by