Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective income tax rate was 26.4% and 8.1% for the three months ended September 30, 2021 and 2020, respectively. The increase from the third quarter of 2020 was primarily due to the beneficial impact of changes in valuation allowance related to R&D credits in 2020, partially offset by an increase in current quarter accruals of reserves for uncertain tax positions and the pretax mix across jurisdictions with disparate tax rates. Our effective income tax rate was 25.7% and 23.1% for the nine months ended September 30, 2021 and 2020, respectively. The increase from the first nine months of 2020 was primarily due to the beneficial impact of changes in valuation allowance related to R&D credits in 2020, partially offset by a decrease in the accruals of reserves for unrecognized tax benefits in 2021.

The total amount of unrecognized tax benefits as of September 30, 2021 was $16.4 million, of which $15.8 million would affect our effective tax rate if recognized. Additionally, the balance of unrecognized tax benefits as of September 30, 2021 also included $0.6 million of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

We recognize interest and penalties related to unrecognized tax benefits through income tax expense. As of September 30, 2021, we had $1.6 million accrued for the payment of interest.

We are subject to taxation in the U.S. and various state and foreign jurisdictions. Our tax years from 2016 through 2020 are subject to examination by the tax authorities. With few exceptions, we are no longer subject to U.S. federal, state, local and foreign examinations by tax authorities for the years before 2016.