Company: MSEX
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001174947-25-000251
Chunk: 322

Company: MIDDLESEX WATER CO
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1B
Chunk 322
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106)
  
    Tangible Property Repairs 
     (4,535) 
     (5,475) 
     (6,767)
  
    State Income Taxes – Net 
     1,270  
     1,117  
     1,296 
  
    Other 
     65  
     55  
     227 
  
    Total Income Tax Expense 
    $6,905  
    $1,041  
    $3,240 

Income tax expense (benefit) is comprised of the following:

    (In Thousands)

    Years Ended December 31,

    2024 
    2023 
    2022
  
    Current: 

    Federal 
    $1,554  
    $2,952  
    $425 
  
    State 
     1,126  
     1,066  
     1,381 
  
    Deferred: 

    Federal 
     3,802  
     (3,261) 
     1,242 
  
    State 
     482  
     348  
     260 
  
    Investment Tax Credits 
     (59) 
     (64) 
     (68)
  
    Total Income Tax Expense 
    $6,905  
    $1,041  
    $3,240 

As part of Middlesex’s March 2018 general
rate case settlement with the NJBPU, Middlesex received approval for regulatory accounting treatment of income tax benefits associated
with the adoption of tangible property regulations issued by the IRS (fully amortized as of March 31, 2022) as well as prospective recognition
of the income tax benefits for the immediate deduction of repair costs on tangible property. This results in significant reductions in
the Company’s effective income tax rate, current income tax expense and deferred income tax expense (benefit).

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. The components
of the net deferred tax liability are as follows:

    (In Thousands)

    December 31,

    2024 
    2023
  
    Utility Plant Related 
    $95,877  
    $84,330 
  
    Customer Advances 
     (3,525) 
     (3,546)
  
    Employee