Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company has accounted for income taxes under the asset and liability method, which requires deferred tax assets and liabilities to be recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts and respective tax bases of existing assets and liabilities, as well as net operating loss carryforwards and research and development credits. Valuation allowances are provided if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. For the three months ended March 31, 2023, the effective income tax rate was 0% and the Company recorded $0 from its pretax gain of $8,068. For the three months ended March 31, 2022, the Company recorded no income tax benefit from its pretax loss of $13,220.

The primary factors impacting the effective tax rate for three months ended March 31, 2023, is the anticipated full year pre-tax book loss, the expected utilization of net operating losses and research and development credits to offset any current year tax liabilities, and a full valuation allowance against any associated net deferred tax assets.