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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Vimeo was included within IAC’s tax group for purposes of federal and consolidated state income tax return filings through the Spin-off. For the year ended December 31, 2021, the current and deferred income tax provision were computed on an as if standalone, separate tax return basis. For the years ended December 31, 2023 and 2022, the income tax provision was computed for Vimeo on a true standalone basis.
U.S. and foreign earnings (losses) before income taxes are as follows:
 Years Ended December 31,
 202320222021
 (In thousands)
U.S. $15,189 $(90,500)$(54,085)
Foreign9,722 12,835 2,146 
Earnings (loss) before income taxes$24,911 $(77,665)$(51,939)
The income tax provisions for the years ended December 31, 2023, 2022, and 2021 primarily relate to international and state taxes for jurisdictions in which Vimeo conducts business and are as follows:
 December 31,
 202320222021
 (In thousands)
Current income tax provision:  
Federal$294 $81 $52 
State466 88 85 
Foreign1,402 1,351 761 
Current income tax provision2,162 1,520 898 
Deferred income tax provision (benefit):  
Federal167 37 (20)
State— (4)(5)
Foreign550 373 (45)
Deferred income tax provision (benefit)717 406 (70)
Income tax provision$2,879 $1,926 $828 
The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.
 December 31,
 20232022
 (In thousands)
Deferred tax assets: 
Net operating loss carryforwards$14,566 $31,069 
Tax credit carryforwards13,509 12,138 
Accrued bonus3,745 2,449 
Stock-based compensation10,767 10,209 
Capitalized research and development expenses26,977 14,242 
Other4,569 7,509 
Total deferred tax assets74,133 77,616 
Less: valuation allowance(62,108)(67,544)
Net deferred tax assets12,025 10,072 
Deferred tax liabilities: 
Prepaid expenses(5,468)(4,834)
Intangible assets with definite lives(3,308)(925)
Right-of-use assets(3,303)(3,755)
Withholding taxes(1,083)(905)
Other(56)(106)
Total deferred tax liabilities(13,218)(10,525)
Net deferred tax liabilities (a)
$(1,193)$(453)
____________________
(a)    Net deferred tax liabilities are included in "Other long-term liabilities" in the accompanying consolidated balance sheet.

The composition of Vimeo's NOLs as of December 31, 2023 is as follows:
FederalStateForeignTotal
 (In thousands)
Subject to expiration (a)
$139 $44,538 $— $44,677 
Indefinite carryforward (b)
12,999 5,747 40,851 59,597 
Total NOLs (c)
$13,138 $50,285 $40,851 $104,274 
____________________
(a)    Federal NOL will expire in 2035 and state NOLs will expire at various times between 2026 through 2042.
(b)    All indefinite carryforward federal NOLs are subject to the Tax Cuts and Jobs Act 80% taxable income limitation.
(c)    State NOLs of $1.7 million are subject to limitations under IRC Section 382, separate return limitations, and applicable law.

At December 31, 2023, Vimeo has tax credit carryforwards of $16.9 million. Of this amount, $14.7 million relates to credits for research activities and $2.2 million relates to credits for foreign taxes. These credit carryforwards will expire between 2026 and 2043.
During 2023, Vimeo's valuation allowance decreased by $5.4 million, primarily due to net operating loss utilization, partially offset by deferred tax assets for research and development expenses. At December 31, 2023, Vimeo has a valuation
allowance of $62.1 million related to deferred tax assets on temporary differences, tax credits, and tax loss carryforwards for which it is more likely than not that the tax benefit will not be realized.
A reconciliation of the income tax provision to the amounts computed by applying the statutory federal income tax rate to loss before income taxes is shown as follows:
 Years Ended December 31,
 202320222021
 (In thousands)
Income tax benefit at the federal statutory rate of 21%$5,231 $(16,310)$(10,907)
State income taxes, net of effect of federal tax benefit(359)(1,559)(2,086)
Global intangible low-taxed income2,864 1,307 — 
Section 250 deductions(1,350)— — 
Return to provision2,283 (765)(2,249)
Valuation allowance(4,543)12,736 20,858 
Stock-based compensation(709)8,838 (4,041)
Non-deductible executive compensation377 42 376 
Tax credits(2,441)(2,631)(2,163)
Uncertain tax positions461 — — 
Deferred tax adjustments1,242 (205)63 
Transaction costs— 18 698 
Other, net(177)455 279 
Income tax provision $2,879 $1,926 $828 
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 Years Ended December 31,
 202320222021
 (In thousands)
Balance at beginning of period$2,523 $2,519 $1,921 
Additions based on tax positions related to prior years1,413 74 — 
Settlements— (821)(329)
Additions based on tax positions related to the current year712 751 927 
Balance at end of period$4,648 $2,523 $2,519 

At December 31, 2023, 2022, and 2021, unrecognized tax benefits, including interest and penalties, were $4.6 million, $2.5 million, and $2.5 million, respectively. A portion of unrecognized tax benefits as of December 31, 2023 relates to tax positions included in IAC's consolidated tax return filings. If unrecognized tax benefits at December 31, 2023 are subsequently recognized $0.5 million, net of related deferred tax assets and interest, would decrease income tax expense. Vimeo does not expect any settlements or changes to the existing unrecognized tax benefits by December 31, 2024.
Vimeo is routinely under audit by federal, state, local, and foreign authorities as a result of previously filed separate company and consolidated tax returns with IAC. These audits include questioning the timing, amount, and allocation of income and deductions among various tax jurisdictions. The Internal Revenue Service ("IRS") has completed its audit of IAC's federal income tax returns for the years ended December 31, 2013 through 2019, which includes the operations of the Company. On June 27, 2023, the Joint Committee of Taxation completed its review of the federal income tax returns for the years ended December 31, 2013 through 2019, which include the operations of the Company, and approved the audit settlement previously agreed to with the Internal Revenue Services ("IRS"). The statute of limitations for the years 2013 through 2019 expired on December 31, 2023. Various other jurisdictions are open to examination for tax years beginning with 2014. The liability for uncertain tax positions, which is included in "Other long-term liabilities" in the accompanying consolidated balance sheet, includes unrecognized tax benefits that are considered to be sufficient to pay assessments that may result from the examination
of prior year tax returns. Vimeo considers many factors when evaluating and estimating its tax positions and tax benefits, which may not accurately anticipate actual outcomes and, therefore, may require periodic adjustment. Although management currently believes changes in unrecognized tax benefits from period to period and differences between amounts paid, if any, upon resolution of issues raised in audits and amounts previously provided will not have a material impact on the liquidity, results of operations, or financial condition of Vimeo, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.