Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax provision was $70 for the three months ended September 30, 2022 resulting in an effective tax rate of (0.3)%. The income tax benefit was $5,101 for the three months ended September 30, 2021 resulting in an effective tax rate of 18.8%. The change in the effective income tax rate for the three months ended September 30, 2022, as compared to the prior period in 2021, is primarily due to the valuation allowances that were recorded against the net operating losses during the current period.

The income tax provision was $25,940 for the nine months ended September 30, 2022 resulting in an effective tax rate of (30.9)%. The income tax benefit was $11,473 for the nine months ended September 30, 2021 resulting in an effective tax rate of 17.3%. The change in the effective income tax rate for the nine months ended September 30, 2022, as compared to the prior period in 2021, is primarily due to the valuation allowances that were recorded against the deferred tax assets during the current period.

The Company's cumulative loss position was significant negative evidence in assessing the need for a valuation allowance on its deferred tax assets. Given the weight of objectively verifiable historical losses from operations, the Company recorded a full valuation allowance on its deferred tax assets. The Company will be able to reverse the valuation allowance when it has shown its ability to generate taxable income on a consistent basis in future periods. The valuation allowance does not have an impact on the Company's ability to utilize any net operating losses or other tax attributes to offset cash taxes payable as these items are still eligible to be used.

During the nine months ended September 30, 2022, the Company collected all of the outstanding receivables due to the Company related to net operating loss carrybacks under the Coronavirus Aid, Relief, and Economic Security Act for losses incurred during 2019, which were carried back to 2015.