|12 Months Ended|
Dec. 31, 2021
|Income Tax Disclosure [Abstract]|
|INCOME TAXES||INCOME TAXES
The provision from (benefit for) income taxes consisted of the following:
Domestic and foreign income (loss) before income taxes was as follows:
The provision from (benefit for) income taxes reconciles with the U.S. federal statutory rate, as follows:
We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities. For additional information about our income tax policy see Note 1 of the Notes to Consolidated Financial Statements.
Components of the deferred income tax assets and liabilities at December 31, 2021 and 2020, were as follows:
Our deferred income tax assets and deferred income tax liabilities at December 31, 2021 and 2020, are included in the accompanying Consolidated Balance Sheets as follows:
We record deferred income taxes on the temporary differences of our foreign subsidiaries except for the temporary differences related to undistributed earnings of subsidiaries which we consider indefinitely invested. As of December 31, 2021, we have indefinitely invested $278.0 million attributable to undistributed earnings of our Canadian and Chilean subsidiaries. If these earnings were not considered indefinitely invested, we estimate that $26.8 million of deferred withholding tax liability would have been provided. Further, we are permanently invested with respect to the original investment in foreign subsidiaries.
Therefore, we have not provided the deferred tax assets on the outside basis of these subsidiaries as we have no intent to sell or divest of these subsidiaries. However, the Company has provided for local country withholding taxes related to these earnings.
At December 31, 2021, we had U.S. federal and state net operating loss carryforwards of $73.6 million and $493.9 million, respectively, which will expire at various times between 2022 and 2040. We also had foreign net operating loss carryforwards totaling $274.9 million of which $24.2 million will expire between 2022 and 2041 and the remaining $250.7 million will carryforward indefinitely. Foreign capital loss carryforwards of $18.0 million may be carried forward indefinitely. We had foreign tax credit carryforwards of $17.2 million which will expire in the years 2025 through 2028. Additionally, we had state and foreign research and development credit carryforwards of $34.1 million. The state credits expire between 2022 through 2029 and the foreign credits have an indefinite expiration period. We have state §163(j) interest limitation carryovers of $498.5 million which have an indefinite expiration period. The tax effected amount of the state §163(j) interest limitation carryovers is $4.4 million. The deferred tax asset related to the net operating loss, capital loss carryforwards, foreign tax credit carryforwards, §163(j) carryforwards and research and development credit is $180.7 million of which $64.4 million has been fully reserved in the deferred tax valuation allowance.
Cash paid for income taxes, net of amounts refunded, was $192.3 million, $75.6 million and $12.0 million during the twelve months ended December 31, 2021, 2020 and 2019, respectively.
We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income (Loss).
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
We recorded liabilities of $34.5 million and $27.1 million for unrecognized tax benefits as of December 31, 2021 and 2020, respectively, which included interest and penalties of $5.2 million and $3.1 million, respectively. As of December 31, 2021 and 2020, the total amount of unrecognized benefits that, if recognized, would have affected the effective tax rate was $33.0 million and $26.2 million, respectively, which included interest and penalties of $4.7 million and $2.8 million, respectively. During 2021 and 2020, interest and penalties of $1.0 million were accrued in each period.
As of December 31, 2021 and 2020, the gross amount of unrecognized tax benefits was $48.5 million and $41.5 million, respectively. Of the total, $19.2 million in 2021 and $17.5 million in 2020 relate to unrecognized tax benefits for which no liability has been recorded associated with the carryforward of certain state attributes. If we were to prevail on all uncertain tax positions, the net effect would be a benefit of $29.3 million and $24.0 million in 2021 and 2020, respectively, exclusive of any benefits related to interest and penalties.
Equifax and its subsidiaries are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state or international income tax examinations by tax authorities for years before 2017. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that Equifax’s gross unrecognized tax benefit balance may change within the next twelve months by a range of zero to $7.1 million.Coronavirus Aid, Relief, and Economic Security ActOn March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“The CARES Act”), also known as the Third COVID-19 Supplemental Relief bill and the President of the United States signed the legislation into law. The provisions of the legislation have not had a significant impact on the effective tax rate or the income tax payable and deferred income tax positions of the Company.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef