Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Income (Loss) Before Income Taxes

Components of (loss) income from continuing operations before income taxes are as follows:


	Year ended December 31,
	2022		2021		2020
	(in millions)
Domestic	$	(136.8)	$	46.6	$	(38.7)
Foreign	0.2		—		—
Total (loss) income from continuing operations before income taxes	$	(136.6)	$	46.6	$	(38.7)

Schedule of Provision for Income Tax Expense

The provision for income tax (benefit) expense consists of the following:


	Year ended December 31,
	2022		2021		2020
	(in millions)
Current tax provision
Federal	$	18.3	$	10.9	$	—
State	6.1		3.1		0.9
Total current provision	24.4		14.0		0.9

Deferred tax provision
Federal	(24.6)		—		—
State	(6.0)		(0.3)		—
Total deferred (benefit)	(30.6)		(0.3)		—

Total continuing operations provision	$	(6.2)	$	13.7	$	0.9

Schedule of Effective Income Tax Rate Reconciliation

The effective tax rate for 2021 was 29.6%, which is higher than the U.S. federal statutory tax rate of 21% primarily due to unrealizable net operating losses which require a valuation allowance and the impact of state taxes. Income tax expense (benefit) for continuing operations differs from the amounts computed by applying the U.S. federal statutory income tax rate of 21% to income (loss) before income taxes as follows:


	Year ended December 31,
	2022		2021		2020
	(in millions)
Tax at U.S. federal statutory rate	$	(28.7)	$	9.8	$	—
State taxes, net of federal benefit	(2.7)		1.8		0.9
Stock-based compensation	(0.1)		—		—
Non-deductible expenses	1.6		0.6		—
Remeasurement of TRA liability	—		(0.8)		—
Noncontrolling interest	6.0		(0.5)		—
Valuation allowance	18.2		2.8		—
Other	(0.5)		—		—
Income tax (benefit) expense	$	(6.2)	$	13.7	$	0.9

Schedule of Deferred Tax Assets and Liabilities

The components of the deferred tax assets and liabilities are as follows:


	December 31,
	2022		2021
	(in millions)
Deferred tax assets:
Investment in partnership	$	104.1	$	36.7
Section 163(j) interest expense	2.9		—
Net operating losses	19.8		5.0
Stock-based compensation	3.6		1.8
Research and development credit	0.6		—
Intangible assets	0.6		—
Other	1.0		—
Deferred tax assets, gross	132.6		43.5
Valuation allowance	(25.3)		(4.0)
Total deferred tax assets, net	107.3		39.5

Deferred tax liabilities:
Intangible assets	20.9		0.7


Total deferred tax liabilities	20.9		0.7

Net deferred tax assets (liabilities)	$	86.4	$	38.8

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits (which excludes federal benefits of state taxes, interest, and penalties):


	Year ended December 31,
	2022		2021		2020
	(in millions)
Balance at beginning of period	$	0.1	$	—	$	—
Additions based on tax positions related to prior years	0.1		0.1		—
Settlements	(0.1)		—		—
Balance at ending of period	$	0.1	$	0.1	$	—

Signify Health, Inc. 10-K