Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company has elected to be treated as a RIC under Subchapter M of the Code, and intends to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, the Company must, among other things, distribute to its shareholders in each taxable year generally the sum of at least 90% of the Company’s investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. In addition, a RIC may, in certain cases, satisfy this distribution requirement by distributing dividends relating to a taxable year after the close of such taxable year under the “spillover dividend” provisions of Subchapter M. To maintain tax treatment as a RIC, the Company, among other things, intends to make the requisite distributions to its shareholders, which generally relieves the Company from corporate-level U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, the Company can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, the Company will accrue excise tax on estimated excess taxable income.

For the three months ended September 30, 2024 and 2023, the Company recorded U.S. federal excise tax expense of $1,111 thousand and $123 thousand, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recorded U.S. federal excise tax expense of $1,840 thousand and $367 thousand, respectively.

Taxable Subsidiaries

Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes. For the three and nine months ended September 30, 2024 we recorded U.S. federal and state income tax expense/(benefit) of $(1) thousand and $(4) thousand respectively, for taxable subsidiaries. For the three and nine months ended September 30, 2023, the Company recorded U.S. federal and state income tax expense/(benefit) of $(1) thousand and $(3) thousand, respectively.

The Company recorded a net deferred tax liability of $196 thousand as of September 30, 2024, for taxable subsidiaries, which is significantly related to GAAP to tax outside basis differences in the taxable subsidiaries’ investment in certain partnership interests. The Company recorded a net deferred tax asset of $4 thousand for taxable subsidiaries as of December 31, 2023.