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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table presents the Company’s provision (benefit) for income taxes reflected as a component of income (loss):
For the Year Ended December 31,
202120202019
Current provision (benefit) for income taxes:
Federal$1,393 $(26,273)$991 
State1,330 1,692 386 
Foreign838 221 825 
Total current provision (benefit) for income taxes3,561 (24,360)2,202 
Deferred provision (benefit) for income taxes:
Federal13,819 10,415 6,502 
State4,435 697 335 
Foreign(524)(379)(22)
Total deferred provision (benefit) for income taxes17,730 10,733 6,815 
Total provision (benefit) for income taxes$21,291 $(13,627)$9,017 
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses. During the year ended December 31, 2020, the Company recorded a $7,293 tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $16,795 and an increase to our current receivable of $24,088. The Company continues to assess the potential tax impacts of this legislation on its financial position and results of operations.

The U.S. federal rate is before the consideration of rate reconciling items. A reconciliation of the expected federal provision (benefit) for income taxes on income using the federal statutory income tax rate to the actual provision (benefit) for income taxes and resulting effective income tax rate is as follows for the periods indicated below:
For the Year Ended December 31,
202120202019
Income (loss) before income taxes$65,342 $(38,852)$29,139 
Federal statutory income tax rate21.0 %21.0 %21.0 %
Expected federal provision (benefit) for income taxes at the federal statutory income tax rate13,721 (8,159)6,119 
Effect of state provision (benefit) for income taxes, net of federal benefit4,550 1,929 549 
Effect of non-deductible compensation
4,518 769 105 
Effect of CARES Act refund claims— (7,293)— 
Effect of foreign operations(541)(938)440 
Effect of stock-based compensation
(1,642)(676)(398)
Effect of return-to-accrual154 330 1,524 
Effect of other items531 411 678 
Tax (benefit) on income$21,291 $(13,627)$9,017 
Effective tax rate32.6 %35.1 %31.0 %

For the year ended December 31, 2021, the Company’s effective tax rate on income was equal to 32.6%. The effective tax rate for the year ended December 31, 2021 is higher than the U.S. statutory income tax rate of 21.0% primarily from the impact of state taxes and non-deductible compensation, partially offset by the effect of stock based compensation.

For the year ended December 31, 2020, the Company’s effective tax rate on income from was equal to 35.1%. The effective tax rate for the year ended December 31, 2020 is higher than the U.S. statutory income tax rate of 21.0% primarily from the impact of expected refunds arising from the CARES Act.
For the year ended December 31, 2019, the Company’s effective tax rate on losses from was equal to 31.0%. The effective tax rate for the year ended December 31, 2019 is higher than the U.S. statutory income tax rate of 21.0% primarily due to the return-to-provision, as well as ongoing state and foreign taxes.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:
As of December 31,
20212020
Deferred tax assets:
Net operating loss carryforwards$39,047 $26,404 
Unrealized losses23,419 25,527 
Accrued expenses4,434 3,560 
Unearned premiums39,221 25,626 
Deferred revenue8,706 7,042 
Other deferred tax assets10,475 7,091 
Total deferred tax assets125,302 95,250 
Less: Valuation allowance(8,563)(6,871)
Total net deferred tax assets116,739 88,379 
Deferred tax liabilities:
Property2,467 2,697 
Unrealized gains17,012 17,968 
Other deferred tax liabilities7,819 4,057 
Deferred acquisition cost84,079 47,061 
Advanced commissions34,700 30,977 
Intangibles11,370 10,741 
Total deferred tax liabilities157,447 113,501 
Net deferred tax liability (1)
$40,708 $25,122 
(1) Includes $659 and $939 classified as held for sale as of December 31, 2021 and December 31, 2020, respectively. See Note (4) Dispositions and Assets and Liabilities Held for Sale.


As of January 2016, Tiptree has established a U.S. federal consolidated income tax group and as such files on a consolidated basis, with certain exceptions such as a Fortegra life insurance company and Luxury. Tiptree consolidated, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations. Additionally, as needed the Company will take all necessary steps to comply with any income tax withholding requirements.
As of December 31, 2021, the Company had total U.S. Federal net operating loss carryforwards (NOLs) of $117,098. The following table presents the U.S. Federal NOLs by tax year of expiration:
As of
December 31, 2021
Tax Year of Expiration
2026$— 
2027— 
2028359 
2029— 
2030— 
2031— 
2032— 
2033— 
2034— 
2035491 
203639,862 
2037907 
2038— 
2039— 
2040— 
204142,869 
Indefinite32,610 
Total$117,098 

In addition to the U.S. Federal NOL, Tiptree and its subsidiaries have NOLs in various state jurisdictions totaling $14,399 as of December 31, 2021. Valuation allowances of $8,563 have been established for primarily state deferred tax assets, which are primarily state NOLs, since management has concluded it is more likely than not they will expire unutilized based on existing positive and negative evidence. Management believes it is more likely than not the remaining NOLs and deferred tax assets will be utilized prior to their expiration dates.

As of December 31, 2021, the consolidated valuation allowance for Tiptree was $8,563. In 2021, the Company recorded a net increase in its valuation allowances equal to $1,692, compared to a net increase in its valuation allowance of $1,910 in 2020.

As of December 31, 2021 and 2020, the Company had no material unrecognized tax benefits or accrued interest and penalties. Federal tax years 2017 and onward are open for examination as of December 31, 2021.