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INCOME TAXES (Tables) | 9 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Schedule of Distribution | Our distributions for the tax years ended December 31, 2024, 2023 and 2022 were as follows:
Payment Date | Cash Dividend
Tax Year Ended December 31, 2024 |
March 31, 2024 1 | $ | 0.63 |
June 30, 2024 1 | 0.63 |
September 30, 2024 1 | 0.64 |
December 31, 2024 2 | 0.63 |
| $ | 2.53 |
Tax Year Ended December 31, 2023 |
March 31, 2023 2 | $ | 0.58 |
June 30, 2023 2 | 0.59 |
September 30, 2023 1 | 0.62 |
December 31, 2023 1 | 0.63 |
| $ | 2.42 |
Tax Year Ended December 31, 2022 |
March 31, 2022 | $ | 0.48 |
June 30, 2022 3 | 0.63 |
September 30, 2022 | 0.50 |
December 31, 2022 2 | 0.57 |
| $ | 2.18 |
1.On each of these dates, the dividend paid included a supplemental dividend of $0.06 per share. 2.On each of these dates, the dividend paid included a supplemental dividend of $0.05 per share. 3.On June 30, 2022, CSWC paid a regular dividend of $0.48 per share and a special dividend of $0.15 per share. The tax character of distributions paid for the tax years ended December 31, 2024 and 2023 was as follows (amounts in thousands):
| Twelve Months Ended December 31,
| 2024 |  | 2023
Ordinary income | $ | 118,216 |  |  | $ | 94,139 |
Distributions of long term capital gains | — |  |  | — |
Distributions on tax basis 1 | $ | 118,216 |  |  | $ | 94,139 |
1 Includes only those distributions which reduce estimated taxable income.
Schedule of Book and Tax Basis Differences Relating to Dividends and Distributions | Book and tax basis differences relating to dividends and distributions to our shareholders and other permanent book and tax differences are typically reclassified among the CSWC’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP; accordingly, for the years ended December 31, 2024 and 2023, CSWC reclassified for book purposes amounts arising from permanent book/tax differences related to the tax treatment of return of capital and/or deemed distributions, tax treatment of investments upon disposition, and non-deductible expenses, as follows (amounts in thousands):
| Nine Months Ended December 31,
| 2024 |  | 2023
Additional capital | $ | (5,521) |  |  | $ | (5,277) |
Total distributable earnings | 5,521 |  |  | 5,277 |
Schedule of Net Assets Resulting from Operations to Estimated RIC Taxable Income | The following reconciles net increase in net assets resulting from operations to estimated RIC taxable income for the nine months ended December 31, 2024 and 2023:
| Nine Months Ended December 31, |  |
Reconciliation of RIC Distributable Income 1 | 2024 |  | 2023 |  |  |  |
Net increase in net assets from operations | $ | 52,987 |  |  | $ | 69,920 |  |  |  |  |
Net unrealized depreciation (appreciation) on investments | 14,574 |  |  | (9,906) |  |  |  |  |
(Expense/loss) income/gain recognized for tax on pass-through entities | (80) |  |  | (4,123) |  |  |  |  |
Realized loss (gain) book/tax differences | 8,580 |  |  | (678) |  |  |  |  |
Capital loss carryover 2 | 12,987 |  |  | 24,429 |  |  |  |  |
Net operating income - wholly-owned subsidiary | (2,705) |  |  | (4,931) |  |  |  |  |
Dividend income from wholly-owned subsidiary | (962) |  |  | — |  |  |  |  |
Non-deductible tax expense | 1,016 |  |  | 640 |  |  |  |  |
Loss on extinguishment of debt | (2,045) |  |  | (2,045) |  |  |  |  |
Non-deductible compensation | 5,164 |  |  | 2,772 |  |  |  |  |
Compensation related book/tax differences | (3,887) |  |  | (466) |  |  |  |  |
Interest on non-accrual loans | 10,513 |  |  | 3,959 |  |  |  |  |
Other book/tax differences | (237) |  |  | 1,434 |  |  |  |  |
Estimated distributable income before deductions for distributions | $ | 95,905 |  |  | $ | 81,005 |  |  |  |  |
1 The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate. 2 At December 31, 2024, the Company had long-term capital loss carryforwards of $72.3 million to offset future capital gains. These capital loss carryforwards are not subject to expiration.
Schedule of Deferred Tax Assets and Liabilities | The following table sets forth the significant components of the deferred tax assets and liabilities as of December 31, 2024 and March 31, 2024 (amounts in thousands):
| December 31, 2024 |  | March 31, 2024
Deferred tax asset: |  |  |
Net operating loss carryforwards | $ | 261 |  |  | $ | 159 |
Interest | 1,811 |  |  | 965 |
Total deferred tax asset | 2,072 |  |  | 1,124 |
Deferred tax liabilities: |  |  |
Net unrealized appreciation on investments | (14,115) |  |  | (11,395) |
Net basis differences in portfolio investments | (3,586) |  |  | (1,726) |
Total deferred tax liabilities | (17,701) |  |  | (13,121) |
Total net deferred tax (liabilities) assets | $ | (15,629) |  |  | $ | (11,997) |
Schedule of Significant Components of Income Tax Provision | The following table sets forth the significant components of income tax provision as of December 31, 2024 and 2023 (amounts in thousands):
| Three Months Ended December 31, |  | Nine Months Ended December 31, |  |  |  |
Components of Income Tax Provision | 2024 |  | 2023 |  | 2024 |  | 2023 |  |  |  |
Excise tax | $ | 451 |  |  | $ | 338 |  |  | $ | 943 |  |  | $ | 590 |  |  |  |  |
Tax provision related to Taxable Subsidiary | (107) |  |  | 519 |  |  | 627 |  |  | (69) |  |  |  |  |
Other | 23 |  |  | 50 |  |  | 73 |  |  | 50 |  |  |  |  |
Total income tax provision | $ | 367 |  |  | $ | 907 |  |  | $ | 1,643 |  |  | $ | 571 |  |  |  |  |

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