Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes [Line Items]

Income Taxes

Income Taxes

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(239)		$	560		$	526		$	1,052
Tax Computed at Statutory Rate @ 21%	$	(50)		$	118		$	110		$	221
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(24)			25			18			32
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	35			(4)			31			(8)
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	10			(9)			(1)			(2)
Subtotal	(12)			(9)			(55)			(68)
Total Income Tax Expense (Benefit)	$	(62)		$	109		$	55		$	153
Effective Income Tax Rate	25.9		%	19.5		%	10.5		%	14.5		%

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSE&G	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income	$	370		$	330		$	926		$	879
Tax Computed at Statutory Rate @ 21%	$	78		$	69		$	194		$	185
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	25			17			63			54
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	—			6			4			5
Subtotal	(17)			(22)			(54)			(29)
Total Income Tax Expense (Benefit)	$	61		$	47		$	140		$	156
Effective Income Tax Rate	16.5		%	14.2		%	15.1		%	17.7		%

A reconciliation of reported income tax expense for PSEG Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG Power	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(610)		$	234		$	(397)		$	177
Tax Computed at Statutory Rate @ 21%	$	(128)		$	49		$	(83)		$	37
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(49)			10			(45)			(21)
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	38			(2)			36			(4)
Audit Settlement	—			(20)			(2)			(22)
Other	3			3			1			6
Subtotal	1			15			8			(43)
Total Income Tax Expense (Benefit)	$	(127)		$	64		$	(75)		$	(6)
Effective Income Tax Rate	20.8		%	27.4		%	18.9		%	(3.4)		%

In March 2021, the White House released an overview of the American Jobs Plan. In April 2021, the Treasury Department issued The Made in America Tax Plan and in June 2021, the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals in the Fiscal Year 2022 Budget. Each include several tax raising provisions that have not yet been enacted. Further, a prolonged economic recovery may result in additional federal and state tax legislation that can have a material impact on PSEG’s, PSE&G’s and PSEG Power’s effective tax rate and cash tax position.

Amounts recorded under the Tax Cuts and Jobs Act of 2017, Coronavirus Aid, Relief, and Economic Security Act and Consolidated Appropriations Act, 2021 are subject to change based on several factors, including, among other things, whether the Internal Revenue Service or state taxing authorities issue additional guidance and/or further clarification. Any further guidance or clarification could impact PSEG’s, PSE&G’s and PSEG Power’s financial statements.

As of June 30, 2021, PSE&G had a $23 million New Jersey Corporate Business Tax net operating loss (NOL) that is expected to be fully realized in the future. There are no other material tax carryforwards in other jurisdictions.

New Jersey State Tax Reform

In September 2020, New Jersey enacted its State Fiscal Year 2021 Budget, which amended the temporary surtax originally enacted into law in 2018, from 1.5% to 2.5% for 2020 and 2021 and extended the 2.5% surtax to 2023. PSE&G continues to be exempt and this amendment will not have a material impact on PSEG’s and PSEG Power’s financial statements.

Public Service Electric and Gas Company [Member]

Income Taxes [Line Items]

Income Taxes

Income Taxes

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(239)		$	560		$	526		$	1,052
Tax Computed at Statutory Rate @ 21%	$	(50)		$	118		$	110		$	221
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(24)			25			18			32
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	35			(4)			31			(8)
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	10			(9)			(1)			(2)
Subtotal	(12)			(9)			(55)			(68)
Total Income Tax Expense (Benefit)	$	(62)		$	109		$	55		$	153
Effective Income Tax Rate	25.9		%	19.5		%	10.5		%	14.5		%

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSE&G	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income	$	370		$	330		$	926		$	879
Tax Computed at Statutory Rate @ 21%	$	78		$	69		$	194		$	185
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	25			17			63			54
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	—			6			4			5
Subtotal	(17)			(22)			(54)			(29)
Total Income Tax Expense (Benefit)	$	61		$	47		$	140		$	156
Effective Income Tax Rate	16.5		%	14.2		%	15.1		%	17.7		%

A reconciliation of reported income tax expense for PSEG Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG Power	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(610)		$	234		$	(397)		$	177
Tax Computed at Statutory Rate @ 21%	$	(128)		$	49		$	(83)		$	37
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(49)			10			(45)			(21)
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	38			(2)			36			(4)
Audit Settlement	—			(20)			(2)			(22)
Other	3			3			1			6
Subtotal	1			15			8			(43)
Total Income Tax Expense (Benefit)	$	(127)		$	64		$	(75)		$	(6)
Effective Income Tax Rate	20.8		%	27.4		%	18.9		%	(3.4)		%

In March 2021, the White House released an overview of the American Jobs Plan. In April 2021, the Treasury Department issued The Made in America Tax Plan and in June 2021, the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals in the Fiscal Year 2022 Budget. Each include several tax raising provisions that have not yet been enacted. Further, a prolonged economic recovery may result in additional federal and state tax legislation that can have a material impact on PSEG’s, PSE&G’s and PSEG Power’s effective tax rate and cash tax position.

Amounts recorded under the Tax Cuts and Jobs Act of 2017, Coronavirus Aid, Relief, and Economic Security Act and Consolidated Appropriations Act, 2021 are subject to change based on several factors, including, among other things, whether the Internal Revenue Service or state taxing authorities issue additional guidance and/or further clarification. Any further guidance or clarification could impact PSEG’s, PSE&G’s and PSEG Power’s financial statements.

As of June 30, 2021, PSE&G had a $23 million New Jersey Corporate Business Tax net operating loss (NOL) that is expected to be fully realized in the future. There are no other material tax carryforwards in other jurisdictions.

New Jersey State Tax Reform

In September 2020, New Jersey enacted its State Fiscal Year 2021 Budget, which amended the temporary surtax originally enacted into law in 2018, from 1.5% to 2.5% for 2020 and 2021 and extended the 2.5% surtax to 2023. PSE&G continues to be exempt and this amendment will not have a material impact on PSEG’s and PSEG Power’s financial statements.

PSEG Power [Member]

Income Taxes [Line Items]

Income Taxes

Income Taxes

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(239)		$	560		$	526		$	1,052
Tax Computed at Statutory Rate @ 21%	$	(50)		$	118		$	110		$	221
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(24)			25			18			32
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	35			(4)			31			(8)
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	10			(9)			(1)			(2)
Subtotal	(12)			(9)			(55)			(68)
Total Income Tax Expense (Benefit)	$	(62)		$	109		$	55		$	153
Effective Income Tax Rate	25.9		%	19.5		%	10.5		%	14.5		%

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSE&G	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income	$	370		$	330		$	926		$	879
Tax Computed at Statutory Rate @ 21%	$	78		$	69		$	194		$	185
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	25			17			63			54
Tax Adjustment Credit	(42)			(45)			(121)			(88)
Other	—			6			4			5
Subtotal	(17)			(22)			(54)			(29)
Total Income Tax Expense (Benefit)	$	61		$	47		$	140		$	156
Effective Income Tax Rate	16.5		%	14.2		%	15.1		%	17.7		%

A reconciliation of reported income tax expense for PSEG Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Six Months Ended
PSEG Power	June 30,						June 30,
	2021			2020			2021			2020
	Millions
Pre-Tax Income (Loss)	$	(610)		$	234		$	(397)		$	177
Tax Computed at Statutory Rate @ 21%	$	(128)		$	49		$	(83)		$	37
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(49)			10			(45)			(21)
NDT Fund	9			24			18			(2)
Tax Credit Amortization/ITC Recapture	38			(2)			36			(4)
Audit Settlement	—			(20)			(2)			(22)
Other	3			3			1			6
Subtotal	1			15			8			(43)
Total Income Tax Expense (Benefit)	$	(127)		$	64		$	(75)		$	(6)
Effective Income Tax Rate	20.8		%	27.4		%	18.9		%	(3.4)		%

In March 2021, the White House released an overview of the American Jobs Plan. In April 2021, the Treasury Department issued The Made in America Tax Plan and in June 2021, the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals in the Fiscal Year 2022 Budget. Each include several tax raising provisions that have not yet been enacted. Further, a prolonged economic recovery may result in additional federal and state tax legislation that can have a material impact on PSEG’s, PSE&G’s and PSEG Power’s effective tax rate and cash tax position.

Amounts recorded under the Tax Cuts and Jobs Act of 2017, Coronavirus Aid, Relief, and Economic Security Act and Consolidated Appropriations Act, 2021 are subject to change based on several factors, including, among other things, whether the Internal Revenue Service or state taxing authorities issue additional guidance and/or further clarification. Any further guidance or clarification could impact PSEG’s, PSE&G’s and PSEG Power’s financial statements.

As of June 30, 2021, PSE&G had a $23 million New Jersey Corporate Business Tax net operating loss (NOL) that is expected to be fully realized in the future. There are no other material tax carryforwards in other jurisdictions.

New Jersey State Tax Reform

In September 2020, New Jersey enacted its State Fiscal Year 2021 Budget, which amended the temporary surtax originally enacted into law in 2018, from 1.5% to 2.5% for 2020 and 2021 and extended the 2.5% surtax to 2023. PSE&G continues to be exempt and this amendment will not have a material impact on PSEG’s and PSEG Power’s financial statements.