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Income Taxes
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
12. INCOME TAXES:
Quanta’s effective tax rates for the three months ended September 30, 2022 and 2021 were 31.8% and 26.0%. Quanta’s effective tax rate for the three months ended September 30, 2022 was predominately impacted by losses on the Starry marketable securities for which a valuation allowance was recorded, which is further described below. Quanta’s effective tax rates for the nine months ended September 30, 2022 and 2021 were 26.3% and 23.2%. The tax rates for the nine months ended
September 30, 2022 and 2021 were favorably impacted by the recognition of $22.7 million and $19.7 million of benefits that resulted from equity incentive awards vesting at a higher fair market value than their grant date fair value. The effective tax rate for the nine months ended September 30, 2022 was also unfavorably impacted by the valuation allowance on the losses on Starry.
Quanta regularly evaluates valuation allowances established for deferred tax assets for which future realization is uncertain, including in connection with changes in tax laws. The estimation of required valuation allowances includes estimates of future taxable income. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Quanta considers projected future taxable income and tax planning strategies in making this assessment. If actual future taxable income differs from these estimates, Quanta may not realize deferred tax assets to the extent estimated. During the three and nine months ended September 30, 2022, Quanta recognized $26.5 million and $76.5 million of unrealized losses on its investment in Starry as further described in Note 8. These losses created a deferred tax asset; however, since Quanta currently has no readily available means to utilize the capital loss, a valuation allowance on the deferred tax asset has been included in its estimated annual effective tax rate.
As of September 30, 2022, the total amount of unrecognized tax benefits relating to uncertain tax positions was $42.3 million, a net increase of $4.6 million from December 31, 2021, which primarily resulted from a $6.9 million increase related to positions expected to be taken in 2022, partially offset by a $2.6 million reduction related to the settlement of audits during the quarter. Quanta’s consolidated federal income tax return for tax year 2019 is currently under examination by the Internal Revenue Services (IRS), and Quanta’s consolidated federal income tax returns for tax years 2017, 2018, 2020 and 2021 remain open to examination by the IRS, as the applicable statute of limitations periods have not yet expired. Additionally, various state and foreign tax returns filed by Quanta and certain subsidiaries for multiple periods remain under examination by various U.S. state and foreign tax authorities. Quanta does not consider any state in which it does business to be a major tax jurisdiction. Quanta believes it is reasonably possible that within the next 12 months unrecognized tax benefits may decrease by up to $5.5 million as a result of settlement of these examinations or as a result of the expiration of certain statute of limitations periods.