Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 8.Income Taxes

Effective Tax Rate

The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:

	Three months ended June 30,						Six months ended June 30,
(in millions)	2021			2020			2021			2020
Edison International:
Income from operations before income taxes	$	429		$	352		$	683		$	481
Provision for income tax at federal statutory rate of 21%		90			74			143			101
Increase (decrease) in income tax from:
State tax, net of federal benefit		18			6			11			(7)
Property-related		(43)			(69)			(126)			(147)
Change related to uncertain tax position1		—			—			—			(15)
Other		3			(7)			4			(12)
Total income tax expense (benefit)	$	68		$	4		$	32		$	(80)
Effective tax rate		15.9	%		1.1	%		4.7	%		(16.6)	%
SCE:
Income from operations before income taxes	$	461		$	437		$	760		$	611
Provision for income tax at federal statutory rate of 21%		97			92			160			129
Increase (decrease) in income tax from:
State tax, net of federal benefit		19			11			15			(1)
Property-related		(43)			(69)			(126)			(147)
Change related to uncertain tax positions1		—			(1)			—			(18)
Other		3			(7)			3			(12)
Total income tax expense (benefit)	$	76		$	26		$	52		$	(49)
Effective tax rate		16.5	%		5.9	%		6.8	%		(8.0)	%

1 Primarily relates to the re-measurement of uncertain tax positions related to the 2010 – 2012 California state tax filings currently under audit.

The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates. For further information, see Note 11.

Tax Disputes

Tax years that remain open for examination by the IRS and the California Franchise Tax Board ("FTB") are 2016 – 2019 and 2013 – 2019, respectively.

Tax years 2007 – 2012 are currently subject to a settlement proceeding with the FTB which is expected to be finalized within the next twelve months. Edison International anticipates incremental cash and earnings benefits resulting from the settlement. Once final, Edison International will update its assessment of uncertain tax positions for all years to reflect the settlement.