Income Taxes

3 Months Ended

Mar. 31, 2021

12. Income Taxes

The Company is subject to income taxes in the U.S. and in foreign jurisdictions. The Company bases its interim tax accruals on an estimated annual effective tax rate applied to

year-to-date

income and record the discrete tax items in the period to which they relate. In each quarter, the Company updates its estimated annual effective tax rate and makes a

year-to-date

adjustment to its tax provision as necessary. The Company’s calendar year 2021 annual effective tax rate differs from the U.S. statutory rate primarily due to stock compensation expense, foreign derived intangible income deduction, and the foreign tax rate differential. For the three months ended March 31, 2021 and 2020, the Company recorded $3.2 million of income tax benefit and $2.9 million of income tax expense, respectively.

On March 11, 2021, the American Rescue Plan Act (“ARPA”) was enacted. The ARPA contains numerous income tax provisions, such as expanding the definition of covered employees. The ARPA has no impact on the income tax provision (benefit) for the three months ended March 31, 2021.

During the three months ended March 31, 2021, there were no material changes to the Company’s unrecognized tax benefits, and the Company does not expect material changes in its unrecognized tax benefits within the next twelve months.


	Three Months Ended March 31
(In thousands)	2021			2020
Provision for (benefit from) income taxes	$	(3,180	)	$	2,864

The change from $2.9 million of tax provision during the three months ended March 31, 2020, to $3.2 million of tax benefit during the three months ended in March 31, 2021 was primarily due to a net loss before taxes compared to a net income before taxes in the respective periods, and an establishment of deferred tax liability related to restructuring during the three months ended March 31, 2020.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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