PUBLIC SERVICE ENTERPRISE GROUP INC Income Taxes Disclosure

Note 19. Income Taxes

The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals.

For the years ended December 31, 2025, 2024 and 2023, PSE&G paid federal income taxes of $8 million, $68 million and $77 million, respectively. State income tax payments were immaterial in each of the years presented.

The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals.

PSEG and PSE&G each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities irrespective of the treatment for ratemaking purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. See Note 5. Regulatory Assets and Liabilities.

The 2018 decrease in the federal tax rate resulted in PSE&G recording excess deferred income taxes. As of December 31, 2025, the remaining balance of excess deferred income taxes is all protected and was approximately $1.2 billion with a Regulatory Liability of approximately $1.7 billion. In 2025, PSE&G returned approximately $436 million of excess deferred income taxes and previously realized and current period deferred income taxes related to tax repair deductions to its customers with a reduction to tax expense of approximately $313 million. The flowback to customers of the excess deferred income taxes and previously realized tax repair deductions resulted in a decrease of approximately $355 million in the Regulatory Liability. The current period tax repair deduction reduces tax expense and revenue and recognizes a Regulatory Asset as PSE&G believes it is probable that the current period tax repair deductions flowed through to the customers will be recovered from customers in the future. See Note 5. Regulatory Assets and Liabilities for additional information.

In August 2022, the Inflation Reduction Act (IRA) was signed into law. The IRA enacted a 15% corporate alternative minimum tax (CAMT), which is based on adjusted financial statement income (AFSI), effective in 2023, and made certain changes to existing energy tax credit laws.

In 2025, PSEG determined that it is subject to CAMT as it is an applicable corporation in accordance with the statute. The impact of the CAMT for the twelve months ended December 31, 2025 was not material. PSEG had determined that it is not subject to the

CAMT for 2024 and 2023 as it was not an applicable corporation in accordance with the statute. In February 2026, the U.S. Treasury issued Notice 2026-07 (CAMT Notice) which clarifies AFSI computation by allowing an adjustment to deduct certain repair and maintenance costs that are capitalized in the applicable financial statement. This CAMT Notice will result in a reduction to AFSI for CAMT purposes. However, certain CAMT rules remain unclear; therefore, the issuance of future authoritative guidance could materially impact PSEG’s and PSE&G’s results of operations, financial condition and cash flows.

In April 2023, the U.S. Treasury issued Revenue Procedure 2023-15 that provides a Natural Gas Safe Harbor (NGSH) method of accounting to determine the annual repair tax deduction for gas T&D property. As a result of the CAMT Notice, PSE&G intends to adopt the NGSH method for its gas distribution assets in its 2025 Federal tax return including a historical cumulative IRC Section 481(a) adjustment. While PSEG is still evaluating this guidance, it expects that the additional repair deductions will reduce our taxable income and AFSI, and will result in lower cash taxes.

The IRA established a new PTC for existing qualified nuclear generation facilities, effective 2024 through 2032, a new technology neutral energy tax credit, inclusive of both new nuclear units and increases to nuclear generation capacity, effective 2025, and the transferability of energy tax credits, effective 2023. The PTC for a given nuclear facility can be multiplied by five if prevailing wage requirements are met, and the value of the PTC is designed to phase down as the facility’s gross receipts increase. Both the PTC rate and reduction amount are subject to the Internal Revenue Service’s determination of annual inflation.

PSEG’s estimated full year 2025 gross receipts for its nuclear operations were above the level at which it would receive PTCs, therefore, PSEG did not record a PTC benefit for the year ended December 31, 2025. For the year ended December 31, 2024, PSEG recorded an income tax benefit associated with PTCs of approximately $350 million. PSEG also recorded an $89 million unrecognized tax benefit, which would affect the effective tax rate if recognized, since the PTCs recorded constitute an uncertain tax position and are subject to change when authoritative guidance is issued by the U.S. Treasury, particularly related to the definition of "gross receipts". Such guidance could result in a material increase or decrease in the net PTC recorded. Further, ZEC revenue has been reduced by the estimated PTCs generated from PSEG Power’s Salem 1, Salem 2, and Hope Creek nuclear plants for the year ended December 31, 2024. ZEC revenue will be adjusted based upon the actual value of the PTCs generated. See Note 2. Revenues for additional information.

Despite the issuance of proposed regulations and various Notices that provide interim guidance on numerous provisions of the IRA, many aspects of the IRA, including the PTCs and the CAMT, remain unclear and are in need of further guidance; therefore, the impact of several provisions of the IRA will have on PSEG's and PSE&G's financial statements is subject to continued evaluation.

In July 2025, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (the Act) was signed into law. The Act made no material changes to the PTC for existing qualified nuclear generation facilities. The Act permanently extends 100% bonus depreciation to qualified business property retroactive to January 19, 2025. The impact of the Act on PSEG’s and PSE&G’s financial statements is subject to continued evaluation.

As of December 31, 2025, PSEG had a $11 million state NOL and PSE&G had a $120 million New Jersey Corporate Business Tax NOL that are both expected to be fully realized in the future.