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INCOME TAXES
9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 10: INCOME TAXES
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions, except percentages)2022202320222023
Loss before income taxes
$(174)$(75)$(859)$(562)
Provision for income taxes10 
Effective tax rate(0.8)%(12.7)%(0.4)%(1.5)%
Our tax provision for interim periods is determined using an estimated annual effective tax rate (“ETR”), adjusted for discrete items arising in the period. In each quarter, we update our estimated annual ETR and make a year-to-date calculation of the provision.
For the three and nine months ended September 30, 2022, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by current state taxes payable.
For the three months ended September 30, 2023, the ETR was lower than the U.S. federal statutory rate primarily due to the accrual of the non-deductible regulatory matters offset by the partial release of our valuation allowance resulting from the recognition of net deferred tax liabilities with the Robinhood
Credit acquisition. For the nine months ended September 30, 2023, the ETR was lower than the U.S. federal statutory rate primarily due to the non-deductible 2021 Founders Award Cancellation and the non-deductible regulatory matters, and by the change in valuation allowance on our U.S. federal and state deferred tax assets offset by our current taxes payable.
The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence during the nine months ended September 30, 2023, we believe it is more likely than not that the tax benefits of the remaining U.S. net deferred tax assets may not be realized.
Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization.