Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company reduces the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized.

Income tax expense (benefit) was a benefit of $(3,166) and $(722) for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022, the effective tax rate was 40.5%, compared to 8.1% for the three months ended March 31, 2021. For the three months ended March 31, 2022, the Company’s recorded income tax expense (benefit) in relation to its pre-tax loss was higher than an amount that would result from applying the applicable statutory tax rates to such loss, primarily due to effectively settling a tax position with a taxing jurisdiction that resulted in a $1,202 reduction in the Company’s liability for unrecognized income tax benefits and a corresponding benefit in income tax expense (benefit).