Company: GDOT
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001386278-25-000034
Chunk: 134

Company: GREEN DOT CORP
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 134
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 our interim income tax provision, as allowed by ASC 740-270-30-18, "Income Taxes – Interim Reporting." We determined we could not use the estimated annual effective tax rate method as we could not calculate a reliable estimate of the annual effective tax rate due to it being highly sensitive to minor changes in our forecasted amounts, thus generating significant variability in the estimated annual effective tax rate and distorting the customary relationship between income tax expense and pre-tax income in interim periods.Income tax expense for the three months ended March 31, 2025 and 2024 differs from the amount computed by applying the statutory federal income tax rate to income before income taxes. The sources and tax effects of the differences are as follows: Three Months Ended March 31, 20252024U.S. federal statutory tax rate21.0 %21.0 %State income taxes, net of federal tax benefit3.4 (1.4)Foreign tax rate differential(0.2)(1.5)General business credits(1.1)(11.5)IRC 162(m) limitation(2.9)(3.6)Stock-based compensation3.8 22.7 Bank owned life insurance income(1.0)(2.9)Bank owned life insurance surrender— 9.3 Nondeductible expenses0.3 2.6 Other0.1 0.1 Effective tax rate23.4 %34.8 %The effective tax rate for the three months ended March 31, 2025 and 2024 differs from the statutory federal income tax rate of 21%, primarily due to state income taxes, net of federal tax benefits, general business credits, stock-based compensation, nondeductible expenses, cash surrender value growth in bank owned life insurance policies, and the Internal Revenue Code (the "IRC") 162(m) limitation on the deductibility of executive compensation. The net decrease in the effective tax rate for the three months ended March 31, 2025 from the prior year comparable period was due to several factors, including a decrease of $0.7 million in the amount of compensation expense that was subject to the IRC 162(m) limitation on the deductibility of certain executive compensation, a $0.3 million decrease in tax expense associated with shortfalls from stock-based compensation, a $0.1 million decrease in tax expense due to nondeductible expenses, a decrease of $0.7 million related