Income Taxes:

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

CARES Act

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which contained, in part, an allowance for deferral of the employer portion of Social Security employment tax liabilities until 2021 and 2022, as well as a COVID-19 employee retention tax credit of up to $5,000 per eligible employee.

Eligible employers are taxpayers experiencing either: (1) a full or partial suspension of business operations stemming from a government COVID-19-related order or (2) a more than 50% drop in gross receipts compared to the corresponding calendar quarter in 2019. This 50% employee retention tax credit applies up to $10,000 in qualified wages paid between March 13, 2020 through December 31, 2020, and is refundable to the extent it exceeds the employer portion of payroll tax liability.

Eligible wages or employer-paid health benefits must be paid for the period of time during which an employee did not provide services. However, employees do not need to stop providing all services to the employer for the credit to potentially apply.

Additionally, the CARES Act accelerates the amount of alternative minimum tax (“AMT”) credits that can be refunded for the 2018 and 2019 annual tax returns.

During the second quarter 2020, we utilized the payroll tax deferral provision which allowed us to defer payment of approximately $2.9 million of Social Security employment tax liabilities. We are currently reviewing the potential future benefits of the CARES Act related to employee retention tax credits to assess the impact on our financial position, results of operations and cash flows.

Income tax (expense) for the Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019.

Income tax (expense) for the three months ended June 30, 2020 was $(4.8) million compared to $(2.3) million reported for the same period in 2019. For the three months ended June 30, 2020, the effective tax rate was 16.4% compared to 11.5% for the same period in 2019. The higher effective tax rate is primarily due to a prior year discrete tax benefit related to repairs and certain indirect costs.

Income tax (expense) for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019.

Income tax (expense) for the six months ended June 30, 2020 was $(21) million compared to $(20) million reported for the same period in 2019. For the six months ended June 30, 2020, the effective tax rate was 14.6% compared to 13.5% for the same period in 2019. The higher effective tax rate is primarily due to a prior year discrete tax benefit related to repairs and certain indirect costs and a current year discrete tax adjustment related to the impairment of our investment in equity securities of a privately held oil and gas company partially offset by increased tax benefits from forecasted federal production tax credits associated with new wind assets.