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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income tax expense were:
| 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |
Federal | $ | 8,587 |  |  | 11,349 |  |  | 7,577 |
State | 2,633 |  |  | 2,528 |  |  | 2,126 |
Deferred: |  |  |  |  |
Federal | (3,811) |  |  | (8,073) |  |  | (1,929) |
State | 960 |  |  | 2,576 |  |  | 680 |
| $ | 8,369 |  |  | 8,380 |  |  | 8,454 |
The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $68,847, $69,895 and $32,081 in 2021, 2020 and 2019:
| 2021 |  | 2020 |  | 2019
Income tax at federal statutory rate | $ | 14,458 |  |  | 14,678 |  |  | 6,737 |
Increase (decrease) in taxes attributable to: |  |  |  |  |
State taxes, net of federal income tax benefit | 4,572 |  |  | 4,142 |  |  | 2,251 |
Uncertain tax positions | 1,678 |  |  | 1,351 |  |  | 323 |
Property flow-through | (8,573) |  |  | (9,215) |  |  | (2,054) |
Capitalized merger costs | — |  |  | (296) |  |  | 5,350 |
Tax reform - rate change impact on deferred taxes | — |  |  | — |  |  | 77 |
Reversal of excess deferred taxes recognized in regulatory liability | (3,295) |  |  | (2,912) |  |  | (2,355) |
Pension flow-through | 429 |  |  | 92 |  |  | (1,244) |
Stock-based compensation | (331) |  |  | (333) |  |  | (223) |
Other items, net | (569) |  |  | 873 |  |  | (408) |
| $ | 8,369 |  |  | 8,380 |  |  | 8,454 |
The components of the net deferred tax liability as of December 31 was as follows:
| 2021 |  | 2020
Deferred tax assets: |  |  |
Advances and contributions | $ | 24,584 |  |  | 22,573 |
Unamortized investment tax credit | 599 |  |  | 619 |
Pensions, postretirement benefits and stock-based compensation | 32,396 |  |  | 41,180 |
Debt premium, net | 5,579 |  |  | 6,290 |
California franchise tax | 514 |  |  | 756 |
Net operating loss | — |  |  | 550 |
Other | 8,128 |  |  | 6,792 |
Total deferred tax assets | 71,800 |  |  | 78,760 |
Deferred tax liabilities: |  |  |
Utility plant | 216,497 |  |  | 209,541 |
Pension and postretirement | 24,779 |  |  | 31,227 |
Deferred gain and other-property | 5,901 |  |  | 5,875 |
Regulatory asset - business combinations debt premium, net | 5,579 |  |  | 6,290 |
Intangibles | 3,193 |  |  | 3,443 |
Deferred revenue | 773 |  |  | 297 |
Regulatory asset - income tax temporary differences, net | 6,867 |  |  | 1,195 |
Section 481(a) adjustments | 3,111 |  |  | 4,763 |
Other | 5,551 |  |  | 7,544 |
Total deferred tax liabilities | 272,251 |  |  | 270,175 |
Net deferred tax liabilities | $ | 200,451 |  |  | 191,415 |
Management evaluates the realizability of deferred tax assets based on all available evidence, both positive and negative. The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods in which the deferred tax assets are expected to reverse. Based on all available evidence, management believes it is more likely than not that SJW Group will realize the benefits of its deferred tax assets. Accordingly, the valuation allowance relating to deferred tax assets acquired from CTWS was released in 2020 through purchase accounting adjustments made within the measurement period. Net operating loss carryforwards expire beginning in 2032 and ending in 2039. As of December 31, 2021, the estimated amount of net operating loss carryforwards available to offset future taxable income for Connecticut purposes is $26,820. The estimated state tax credit carryforwards are $667 which will expire beginning in 2023 and ending in 2040. The change in the net deferred tax liabilities of $9,036 in 2021 included other non-cash items primarily consisting of regulatory assets and liabilities relating to income tax temporary differences. The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and penalties was $7,961 and $6,468 as of December 31, 2021 and 2020, respectively. The amount of tax benefits, net of any federal benefits for state taxes that would impact the effective rate, if recognized, is approximately $7,009 and $5,600 as of December 31, 2021 and 2020, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2021 |  | 2020 |  | 2019
Balance at beginning of year | $ | 6,468 |  |  | 3,834 |  |  | 1,382 |
Increase related to tax positions taken during the current year | 1,376 |  |  | 1,104 |  |  | 351 |
Increase related to tax positions taken during a prior year | 117 |  |  | 1,530 |  |  | 3,483 |
Reductions related to tax positions taken in a prior year | — |  |  | — |  |  | (1,382) |
Balance at end of year | $ | 7,961 |  |  | 6,468 |  |  | 3,834 |
The increase in gross unrecognized tax benefits in 2021 was primarily due to the uncertain tax position relating to repairs tax deductions. SJW Group’s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense. Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is approximately $376 as of December 31, 2021. SJW Group has not accrued any penalties for unrecognized tax benefits. The amount of interest recognized in 2021 was an increase to expense of $270. SJW Group does not foresee material changes to its gross uncertain tax liability within the next 12 months following December 31, 2021. SJW Group files U.S. federal income tax returns and income tax returns in various states and is subject to ordinary statute of limitation of three years for federal and three or four years for different state returns. However, due to tax attribute carryforwards, SJW Group is subject to examination for tax years 2009 forward for federal and 2012 forward for state returns of CTWS and its subsidiaries. The statute of limitation for SJW Group returns is closed for these extended years and remains open for 2018 and forward for federal and 2017 or 2018 and forward for different states.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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