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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Altice USA files a federal consolidated and certain state combined income tax returns with its 80% or more owned subsidiaries. CSC Holdings and its subsidiaries are included in the consolidated federal income tax returns of Altice USA. The income tax provision for CSC Holdings is determined on a stand-alone basis for all periods presented as if CSC Holdings filed separate consolidated income tax returns. In accordance with a tax sharing agreement between CSC Holdings and Altice USA, CSC Holdings has an obligation to Altice USA for its stand-alone current tax liability as if it filed separate income tax returns.
Income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consist of the following components:
Altice USACSC Holdings
Years Ended December 31,Years Ended December 31,
 202120202019202120202019
Current expense (benefit):
Federal$168,397 $— $— $179,032 $(55,044)$240,229 
State56,211 65,804 33,103 56,211 82,238 70,567 
Foreign(3)— — (3)— — 
 224,605 65,804 33,103 235,240 27,194 310,796 
Deferred expense (benefit):
Federal70,989 113,871 43,105 70,989 156,338 (176,591)
State(30,108)(38,359)(28,174)(38,608)(55,121)(62,118)
Foreign(180)— — (180)— — 
 40,701 75,512 14,931 32,201 101,217 (238,709)
265,306 141,316 48,034 267,441 128,411 72,087 
Tax benefit relating to uncertain tax positions29,669 (1,568)(844)29,669 (1,568)(844)
Income tax expense$294,975 $139,748 $47,190 $297,110 $126,843 $71,243 
The income tax expense (benefit) attributable to Altice USA's operations differs from the amount derived by applying the statutory federal rate to pretax loss principally due to the effect of the following items:
Altice USACSC Holdings
Years Ended December 31,Years Ended December 31,
202120202019202120202019
Federal tax expense at statutory rate$274,240 $122,478 $39,297 $274,240 $122,363 $59,653 
State income taxes, net of federal impact21,492 59,383 (6,256)13,973 58,802 (9,060)
Changes in the valuation allowance13,573 10,333 4,079 12,793 10,598 4,307 
Changes in the state rates used to measure deferred taxes, net of federal impact
(6,924)(46,768)(1,046)(7,125)(46,768)6,532 
Tax expense (benefit) relating to uncertain tax positions29,669 (1,568)(847)29,669 (1,568)(847)
Tax credits(7,589)(17,205)— (7,589)(17,205)— 
Non-deductible share-based compensation related to the carried unit plan
169 2,108 15,642 169 2,108 15,642 
Non-deductible officers compensation7,201 6,715 — 7,201 6,715 — 
Other permanent differences(35,256)— — (35,256)— — 
Other non-deductible expenses (benefits)1,483 (883)1,334 1,483 (886)1,334 
Other, net(3,083)5,155 (5,013)7,552 (7,316)(6,318)
Income tax expense$294,975 $139,748 $47,190 $297,110 $126,843 $71,243 
In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. Included in the CARES Act, was a revision to IRC Sec 163(j) increasing the ATI (adjusted taxable income) limit of deductible interest from 30% to 50% for tax years 2019 and 2020. The additional deductible interest on the 2019 federal return was $176,539, tax-effected; as a result, the previously reported federal net operating loss carryforwards (“NOLs”) were increased by $176,539, resulting in a net zero tax impact for CSC Holdings and Altice USA.
Altice USA and CSC Holdings recorded a net deferred tax benefit of $6,924 and $7,125, respectively, for the year ended December 31, 2021, and $46,768 for the year ended December 31, 2020 based on a remeasurement of the net deferred tax liability as a result of a decrease in the blended state tax rate utilized to tax-effect the gross temporary differences. In addition, in 2021, due to internal restructuring of i24NEWS and a permanent reduction in tax relating to the Opportunity Zones commitment (see note below), a permanent tax benefit of $35,256 was recognized. In 2020, the Company recorded a $17,205 benefit resulting from research and development tax credits for the years 2016-2019.
The tax effects of temporary differences which give rise to significant portions of deferred tax assets or liabilities and the corresponding valuation allowance are as follows:
Altice USACSC Holdings
 December 31,December 31,
 2021202020212020
Noncurrent
NOLs, capital loss, and tax credit carry forwards$171,707 $75,912 $134,260 $30,745 
Compensation and benefit plans63,870 57,198 63,870 57,198 
Restructuring liability2,208 7,169 2,208 7,169 
Other liabilities40,946 49,363 40,946 49,363 
Liabilities under derivative contracts475,970 510,519 475,970 510,519 
Interest deferred for tax purposes63,402 38,100 63,402 38,100 
Operating lease liability65,538 70,648 65,538 70,648 
Other— 199 — 199 
Deferred tax assets883,641 809,108 846,194 763,941 
Less: Valuation allowance(53,384)(39,811)(35,251)(22,457)
Net deferred tax assets, noncurrent830,257 769,297 810,943 741,484 
Deferred tax liabilities:
Fixed assets and intangibles(4,955,405)(4,979,333)(4,955,405)(4,979,333)
Operating lease asset(51,494)(56,363)(51,494)(56,363)
Investments(559,919)(587,184)(559,919)(587,184)
Partnership investments(143,908)(118,150)(143,908)(118,150)
Prepaid expenses(13,042)(12,755)(13,042)(12,755)
Fair value adjustments related to debt and deferred financing costs
(11,985)(21,679)(11,985)(21,679)
Opportunity Zone tax deferral(142,631)— (142,631)— 
Deferred tax liability, noncurrent(5,878,384)(5,775,464)(5,878,384)(5,775,464)
Total net deferred tax liabilities$(5,048,127)$(5,006,167)$(5,067,441)$(5,033,980)

The tax impact on the Lightpath Transaction discussed in Note 1 of $228,489 is reflected in stockholders' equity (deficiency) of Altice USA as of December 31, 2020. Due to the taxable gain resulting from the Lightpath Transaction, the Company had estimated to fully utilize its federal NOLs, capital loss carryover, research and development tax credits, and general business credits in 2020. However, in May 2021, the Company committed to investing $600,000 of the capital gains generated in the Lightpath Transaction in Qualified Opportunity Zones over the next 5 years, which deferred the tax due on this portion of the gain to 2026, with an expected permanent reduction of ten percent of the deferred tax. As a result, a portion of the federal NOLs and tax credits were reestablished for 2021 and therein fully utilized.
As a result of the Company selling its 1% interest in Newsday LLC, as well as internal restructuring of i24NEWS in 2021, capital losses of $224,791 and $107,682, respectively, were recognized for tax purposes. The Company plans on carrying back the net capital loss against the taxable capital gain generated in the Lightpath Transaction in 2020. In addition, the Company received $48,645 in 2021 relating to a refund request for prior year AMT credits, including $12,161 claimed in 2020 due to the CARES Act acceleration of credits.
Deferred tax assets have resulted primarily from the Company's future deductible temporary differences and NOLs. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, management takes into account various factors, including the expected level of future taxable income, available tax
planning strategies and reversals of existing taxable temporary differences. If such estimates and related assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company's consolidated statements of operations. Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances quarterly. Pursuant to the Cablevision Acquisition and Cequel Acquisition, deferred tax liabilities resulting from the book fair value adjustment increased significantly and future taxable income that will result from the reversal of existing taxable temporary differences for which deferred tax liabilities are recognized is sufficient to conclude it is more likely than not that the Company will realize all of its gross deferred tax assets, except those deferred tax assets against which a valuation allowance has been recorded which relate to certain state NOLs and the foreign NOLs in i24NEWS.
In the normal course of business, the Company engages in transactions in which the income tax consequences may be uncertain. The Company's income tax returns are filed based on interpretation of tax laws and regulations. Such income tax returns are subject to examination by taxing authorities. For financial statement purposes, the Company only recognizes tax positions that it believes are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken or expected to be taken on the tax return are more likely than not of being sustained. Changes in the liabilities for uncertain tax positions are recognized in the interim period in which the positions are effectively settled or there is a change in factual circumstances.
As of December 31, 2021, if all uncertain tax positions were sustained at the amounts reported or expected to be reported in the Company's tax returns, the elimination of the Company's unrecognized tax benefits, net of the deferred tax impact, would decrease income tax expense by $24,811.
The most significant jurisdictions in which the Company is required to file income tax returns include the states of New York, New Jersey, Connecticut, and the City of New York. The State and City of New York are presently auditing income tax returns for tax years 2012 through 2017 and 2015 through 2017, respectively. The State of New Jersey is presently auditing income tax returns for tax years 2014 through 2017. Management does not believe that the resolution of these ongoing income tax examinations will have a material adverse impact on the financial position of the Company.