Company: MSEX
Filing Date: 2025-03-11
Form Type: 10-K/A
Source: 0001174947-25-000318
Chunk: 18

Company: MIDDLESEX WATER CO
Filing Date: 2025-03-11
Form: 10-K/A
Chunk 18
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 |     | 2023 |        |   |     | 2022 |       |   |
|:-------------------------|:----|:-------------------------|------:|:--|:----|:-----|-------:|:--|:----|:-----|------:|:--|
| 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 |   |
|:--------------------------------