Income Taxes

6 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The benefit of income taxes in the three months ended September 30, 2021 and 2020 was $1,441 and $1,298, respectively, reflecting an effective tax rate of 17.5% and an effective tax rate benefit of 14.2%, respectively.

The benefit of income taxes in the six months ended September 30, 2021 was $882, reflecting an effective tax rate benefit of 18.4%. The provision for income taxes in the six months ended September 30, 2020 was $318, reflecting an effective tax rate of 3.2%.

The increases in the effective tax rates for the three and six months ended September 30, 2021 compared to the prior period was primarily due to a net decrease of the research and development credit, foreign rate differential benefit, and higher nondeductible officer compensation.

The deferred tax assets and liabilities are presented net in the accompanying condensed consolidated balance sheets as noncurrent. We expect to receive the full benefit of the deferred tax assets recorded, with the exception of certain state credits and state net operating loss carryforwards, for which we have recorded a valuation allowance.

We had unrecognized tax benefits of $4,438 and $4,426 related to various federal, state, and local income tax matters as of September 30, 2021 and March 31, 2021, respectively. The unrecognized benefits consisted of liabilities of $3,164 and $3,175 and reserves as of September 30, 2021 and March 31, 2021, respectively, against deferred tax assets of $1,274 and $1,251 as of September 30, 2021 and March 31, 2021, respectively. If recognized, this amount would reduce our effective tax rate.

We are no longer subject to United States federal income tax examinations for tax years before fiscal year ended 2017. With a few exceptions, we are no longer subject to state or local income tax examinations for tax years before fiscal year ended 2016. We do not anticipate the total unrecognized tax benefits to significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months.