Income taxes

9 Months Ended

Sep. 30, 2022

Income taxes [Abstract]

Income taxes

8. Income taxes

We recorded an income tax benefit for the third quarter of 2022 of $62 thousand at an effective tax rate of (13.3%), compared to an income tax benefit for the third quarter of 2021 of $442 thousand at an effective tax rate of (96.3%).  For the nine months ended September 30, 2022,  we recorded an income tax benefit of $2.3 million at an effective tax rate of (27.0%), compared to an income tax benefit for the nine months ended September 30, 2021 of $1.6 million at an effective tax rate of (33.6%).

We are subject to U.S. federal income tax, as well as income tax in certain U.S. states and foreign jurisdictions.  We have substantially concluded all U.S. federal, state and local income tax, and foreign tax regulatory examination matters through 2018.  However, our federal tax returns from 2019 through 2021 remain open to examination. Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements.

As of September 30, 2022, we had $116 thousand of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods.  For the third quarter of 2022, we recognized $28 thousand of previously unrecognized tax benefits as the statute of limitations on the use of our 2018 research and development credit expired during the third quarter of 2022.

We recognize interest and penalties related to uncertain tax positions in the income tax provision.  As of September 30, 2022, we had $20 thousand of accrued interest and penalties related to uncertain tax positions.

Management evaluates all jurisdictions based on historical pre-tax earnings and taxable income to determine the need for valuation allowances on a quarterly basis.  The three months ended September 30, 2022 benefitted from the remeasurement of our deferred tax asset valuation allowance associated with our operations in the United Kingdom.  Based on this analysis, we currently have no valuation allowances recorded for any jurisdiction.