INCOME TAXES

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense (benefit) consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Current:
Federal	$	2,813	$	—	$	6,932	$	(7,877)
State and local	1,415		1,438		2,283		1,496
Total current income tax expense (benefit)	4,228		1,438		9,215		(6,381)
Deferred:
Federal	23,690		77,300		100,842		(29,921)
State and local	3,641		22,074		18,684		(12,345)
Total deferred income tax expense (benefit)	27,331		99,374		119,526		(42,266)
Total income tax expense (benefit)	$	31,559	$	100,812	$	128,741	$	(48,647)

New Residential intends to qualify as a REIT for each of its tax years through December 31, 2021. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.

New Residential operates various business segments, including servicing, origination, and MSR related investments, through taxable REIT subsidiaries (“TRSs”) that are subject to regular corporate income taxes, which have been provided for in the provision for income taxes, as applicable. Refer to Note 3 for further details.

As of September 30, 2021, New Residential recorded a net deferred tax liability of $407.6 million, including $280.0 million of deferred tax liability recorded as part of the purchase price allocation related to the Caliber acquisition (Note 1). The deferred tax liability of $407.6 million is primarily composed of deferred tax liabilities generated through the deferral of gains from loans sold by the origination business and changes in fair value of MSRs, loans, and swaps held within taxable entities.