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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Taxes [Line Items]  
Income Taxes Income Taxes
DPL’s components of income tax expense for both continuing and discontinued operations were as follows:
Years ended December 31,
$ in millions202120202019
Components of tax benefit
Federal - current$(5.5)$(45.1)$(22.0)
State and Local - current— (0.1)0.6 
Total current(5.5)(45.2)(21.4)
Federal - deferred4.4 38.7 14.1 
State and local - deferred0.4 1.1 1.1 
Total deferred4.8 39.8 15.2 
Total tax benefit$(0.7)$(5.4)$(6.2)

Effective and Statutory Rate Reconciliation
The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the effective tax rate, as a percentage of total income before taxes for the years ended December 31, 2021, 2020 and 2019:
Years ended December 31,
202120202019
Statutory Federal tax rate21.0 %21.0 %21.0 %
State taxes, net of Federal tax benefit2.8 %(13.1)%1.4 %
AFUDC - equity3.3 %(23.6)%(0.1)%
Depreciation of flow-through differences(29.0)%94.8 %(28.2)%
Amortization of investment tax credits(0.6)%4.1 %(0.3)%
Other, net(0.8)%1.2 %(0.1)%
Effective tax rate(3.3)%84.4 %(6.3)%

Deferred Income Taxes
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. Investment tax credits related to utility property have been deferred and are being amortized over the estimated useful lives of the related property.

The components of our deferred taxes are as follows:
December 31,
$ in millions20212020
Net non-current assets / (liabilities)
Depreciation / property basis$(166.4)$(160.5)
Income taxes recoverable13.6 14.4 
Regulatory assets(20.6)(21.0)
Investment tax credit0.6 0.6 
Compensation and employee benefits(3.4)(1.7)
Intangibles(0.4)(0.4)
Long-term debt(1.5)(1.3)
Other (a)
(9.8)(7.3)
Net non-current liabilities$(187.9)$(177.2)

(a)    The Other caption includes deferred tax assets of $37.1 million in 2021 and $39.0 million in 2020 related to state and local tax net operating loss carryforwards, with related valuation allowances of $37.1 million in 2021 and $39.0 million in 2020. These net operating loss carryforwards expire from 2020 to 2037.
During the year ended December 31, 2021, DPL received a payment from AES of $17.5 million against its tax receivable balance as part of a $150.0 million contribution from AES. During the year ended December 31, 2020, DPL received a payment from AES of $52.0 million against its tax receivable balance as part of a $150.0 million contribution from AES. See Note 9 – Shareholder's Deficit for additional information.

The following table presents the tax expense / (benefit) related to pensions, postemployment benefits, cash flow hedges and financial instruments that were credited to Accumulated other comprehensive loss.
Years ended December 31,
$ in millions202120202019
Tax expense / (benefit)$2.2 $(2.6)$(0.5)

Uncertain Tax Positions
We apply the provisions of GAAP relating to the accounting for uncertainty in income taxes. The balance of unrecognized tax benefits was $0.4 million at December 31, 2021 and $1.4 million at December 31, 2020. Due to the closure of federal tax exams in 2021, the Company has reviewed its uncertain tax positions and determined that $1.0 million will not be sustained. Consequently, the $1.0 million of uncertain tax positions were reversed. The reversals did not affect the annual effective tax rate, but were reclassified to current tax payable. The total amount of remaining unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2021 is $0.4 million.

The amount anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2021 is estimated to be $0.0 million.

The following table presents the changes to our uncertain tax positions:
$ in millions202120202019
Unrecognized tax benefits at January 1$1.4 $3.5 $3.5 
Gross increases - current period tax positions— — — 
Gross decreases - prior period tax positions(1.0)(2.1)— 
Unrecognized tax benefits at December 31$0.4 $1.4 $3.5 

Tax years subsequent to 2011 remain open to examination by taxing authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax positions. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of future examinations may exceed our provision for current unrecognized tax benefits.

We recognize interest and penalties related to unrecognized tax benefits in Income tax expense. The amounts accrued and the tax expense / (benefit) recorded were not material for each period presented.

DPL is no longer subject to U.S. federal income tax examinations for tax years through 2011, but is open for all subsequent periods. DPL is no longer subject to state income tax examinations for tax years through 2016, but is open for all subsequent periods.
THE DAYTON POWER AND LIGHT COMPANY [Member]  
Income Taxes [Line Items]  
Income Taxes Income Taxes
AES Ohio’s components of income tax expense were as follows:
Years ended December 31,
$ in millions202120202019
Components of tax expense / (benefit)
Federal - current$1.1 $3.5 $8.6 
State and Local - current0.1 0.1 0.6 
Total current1.2 3.6 9.2 
Federal - deferred4.1 2.4 (10.9)
State and local - deferred0.4 1.0 1.1 
Total deferred4.5 3.4 (9.8)
Tax expense / (benefit)$5.7 $7.0 $(0.6)
Effective and Statutory Rate Reconciliation
The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the effective tax rate, as a percentage of total income before taxes for the years ended December 31, 2021, 2020 and 2019:
Years ended December 31,
202120202019
Statutory Federal tax rate21.0 %21.0 %21.0 %
State taxes, net of Federal tax benefit1.1 %1.5 %1.3 %
AFUDC - Equity1.3 %2.6 %(0.1)%
Amortization of investment tax credits(0.2)%(0.5)%(0.2)%
Depreciation of flow-through differences(11.7)%(10.6)%(22.6)%
Change in tax reserves(0.1)%(6.1)%— %
Other - net(0.6)%4.1 %0.1 %
Effective tax rate10.8 %12.0 %(0.5)%

Deferred Income Taxes
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. Investment tax credits related to utility property have been deferred and are being amortized over the estimated useful lives of the related property.

The components of our deferred taxes are as follows:
December 31,
$ in millions20212020
Net non-current assets / (liabilities)
Depreciation / property basis$(167.7)$(161.7)
Income taxes recoverable13.6 14.4 
Regulatory assets(21.4)(21.7)
Investment tax credit0.5 0.5 
Compensation and employee benefits(3.4)(0.1)
Other
(5.0)(3.5)
Net non-current liabilities$(183.4)$(172.1)

The following table presents the tax expense / (benefit) related to pensions, postemployment benefits, cash flow hedges and financial instruments that were credited to Accumulated other comprehensive loss.
Years ended December 31,
$ in millions202120202019
Tax expense / (benefit)$2.9 $(2.3)$(0.4)

Uncertain Tax Positions
We apply the provisions of GAAP relating to the accounting for uncertainty in income taxes. The balance of unrecognized tax benefits was $0.4 million at December 31, 2021 and $1.4 million at December 31, 2020. Due to the closure of federal tax exams in 2021, the Company has reviewed its uncertain tax positions and determined that $1.0 million will not be sustained. Consequently, the $1.0 million of uncertain tax positions were reversed. The reversals did not affect the annual effective tax rate, but were reclassified to current tax payable. The total amount of remaining unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2021 is $0.4 million.

The amount anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2021 is estimated to be $0.0 million.

The following table presents the changes to our uncertain tax positions:
$ in millions202120202019
Unrecognized tax benefits at January 1$1.4 $4.8 $4.8 
Gross increases - current period tax positions— — — 
Gross decreases - prior period tax positions(1.0)(3.4)— 
Unrecognized tax benefits at December 31$0.4 $1.4 $4.8 
Tax years subsequent to 2011 remain open to examination by taxing authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax positions. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of future examinations may exceed our provision for current unrecognized tax benefits.

We recognize interest and penalties related to unrecognized tax benefits in Income tax expense. The amounts accrued and the tax expense / (benefit) recorded were not material for each period presented.

AES Ohio is no longer subject to U.S. federal income tax examinations for tax years through 2011, but is open for all subsequent periods. AES Ohio is no longer subject to state income tax examinations for tax years through 2017, but is open for all subsequent periods.