Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Income Tax Provision

The income tax provision consists of the following:

(In millions)	For the Years Ended December 31,
	2021		2020		2019
Income before provision for income taxes:	$	1,260.9	$	549.5	$	855.9
Current provision for income taxes:
Federal	217.9		53.8		94.1
State	38.6		6.6		18.7
	256.5		60.4		112.8
Deferred provision for income taxes:
Federal	36.7		57.3		70.7
State	7.9		11.0		14.8
	44.6		68.3		85.5
Interest and penalties expense:
Interest	1.5		(0.2)		1.5
Penalties	—		—		—
	1.5		(0.2)		1.5
Provision for income taxes	$	302.6	$	128.5	$	199.8

Deferred Taxes

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities consist of the following:

(In millions)	As of December 31,
	2021		2020
Deferred tax assets:
Allowance for credit losses	$	721.8	$	801.4
Stock-based compensation	16.3		15.8
Deferred state net operating loss	2.1		4.3
Other, net	10.9		12.3
Total deferred tax assets	751.1		833.8
Deferred tax liabilities:
Valuation of Loans receivable	1,169.6		1,208.5
Deferred Loan origination costs	1.6		1.6
Other, net	15.1		14.7
Total deferred tax liabilities	1,186.3		1,224.8
Net deferred tax liability	$	435.2	$	391.0

The deferred state net operating loss tax asset arising from the operating loss carryforward for state income tax purposes is expected to expire at various times beginning in 2031, if not utilized. We do not anticipate expiration of the net operating loss carryforwards prior to their utilization.

Effective Income Tax Rate

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:

	For the Years Ended December 31,
	2021		2020		2019
U.S. federal statutory income tax rate	21.0	%	21.0	%	21.0	%
State income taxes	3.0	%	2.7	%	3.1	%
Excess tax benefits from stock-based compensation plans	-0.3	%	-0.5	%	-0.9	%
Other	0.3	%	0.2	%	0.1	%
Effective income tax rate	24.0	%	23.4	%	23.3	%

State income taxes

The increase in our state income tax rate from 2020 to 2021 and the decrease in our state income tax rate from 2019 to 2020 were primarily the result of the settlement of an uncertain tax position for state income taxes during 2020.

Excess tax benefits from stock-based compensation plans

During the first quarter of each year, we receive a tax benefit upon the vesting of restricted stock and the conversion of restricted stock units to common stock based on the fair value of the shares. In addition, we receive a tax benefit upon the exercise of stock options. The amount by which this tax benefit exceeds the grant-date fair value that was recognized as stock-based compensation expense is referred to as an excess tax benefit. Excess tax benefits are recognized in provision for income taxes and reduce our effective income tax rate. The impact of excess tax benefits on our effective income tax rate decreased from 2020 to 2021 primarily due to an increase in pre-tax income. The impact of excess tax benefits on our effective income tax rate decreased from 2019 to 2020, primarily due to a decrease in the number of restricted stock units that were converted to common stock during 2020 due to the timing of our long-term stock award grants.

Unrecognized Tax Benefits

The following table is a summary of changes in gross unrecognized tax benefits:

(In millions)	For the Years Ended December 31,
	2021		2020		2019
Unrecognized tax benefits at January 1,	$	41.8	$	41.7	$	38.7
Additions for tax positions of the current year	13.4		10.2		10.0
Additions for tax positions of prior years	0.9		0.1		—
Reductions for tax positions of prior years	—		—		—
Settlements	—		(4.6)		(2.3)
Reductions as a result of a lapse of the statute of limitations	(6.7)		(5.6)		(4.7)
Unrecognized tax benefits at December 31,	$	49.4	$	41.8	$	41.7

The total amount of gross unrecognized tax benefits that, if recognized, would favorably affect our effective income tax rate in future periods was $49.4 million as of December 31, 2021.  As of December 31, 2021, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months. Accrued interest related to uncertain tax positions was $10.8 million and $9.2 million as of December 31, 2021 and 2020, respectively.

We are subject to income tax in federal and state jurisdictions. We are generally no longer subject to tax examinations on federal returns filed for years prior to 2018 and state returns filed for years prior to 2014.