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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Major Jurisdictions | The following are the major jurisdictions in which Ambac and its subsidiaries operate and the earliest tax years subject to examination:
Jurisdiction | Tax Year
United States | 2010
New York State | 2013
New York City | 2018
United Kingdom | 2019
Italy | 2018
Significant Portions of Deferred Tax Liabilities and Deferred Tax Assets | The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at December 31, 2022 and 2021, are presented below:
December 31, | 2022 |  | 2021
Deferred tax liabilities: |  |  |
Insurance intangible | $ | 56 |  |  | $ | 67 |
Unearned premiums and credit fees | 24 |  |  | 32 |
Investments | — |  |  | 14 |
Variable interest entities | 4 |  |  | 15 |
Other | 1 |  |  | 6 |
Total deferred tax liabilities | 85 |  |  | 134 |
Deferred tax assets: |  |  |
Net operating loss carryforward | 725 |  |  | 736 |
Interest expense carryforward | 66 |  |  | 50 |
Investments | 6 |  |  | — |
Loss reserves | 38 |  |  | 180 |
State capital loss carryforward | 8 |  |  | 7 |
Debentures | 15 |  |  | 7 |
Compensation | 6 |  |  | 8 |
Other | 4 |  |  | 4 |
Subtotal deferred tax assets | 867 |  |  | 993 |
Valuation allowance | 796 |  |  | 886 |
Total deferred tax assets | 70 |  |  | 106 |
Net deferred tax liability | $ | 15 |  |  | $ | 28 |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | U.S. and foreign components of pre-tax income (loss) were as follows:
Year Ended December 31, | 2022 |  | 2021 |  | 2020
U.S. | $ | 511 |  |  | $ | (32) |  |  | $ | (441) |
Foreign | 13 |  |  | 34 |  |  | 1 |
Total | $ | 525 |  |  | $ | 2 |  |  | $ | (440) |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes were as follows:
Year Ended December 31, | 2022 |  | 2021 |  | 2020
Current taxes |  |  |  |  |
U.S. state and local | $ | — |  |  | $ | 2 |  |  | $ | — |
Foreign | 7 |  |  | 10 |  |  | 8 |
Total current taxes | 6 |  |  | 12 |  |  | 8 |
Deferred taxes |  |  |  |  |
Foreign | (4) |  |  | 6 |  |  | (10) |
Total deferred taxes | $ | (4) |  |  | $ | 6 |  |  | $ | (10) |
Provision for income taxes | $ | 2 |  |  | $ | 18 |  |  | $ | (3) |
Schedule Of Income Taxes Charged Credited Directly To Equity | The total effect of income taxes on net income and stockholders’ equity for the years ended December 31, 2022, 2021 and 2020 is as follows:
Year Ended December 31, | 2022 |  | 2021 |  | 2020
Total income taxes charged to net income | $ | 2 |  |  | $ | 18 |  |  | $ | (3) |
Income taxes charged (credited) to stockholders’ equity: |  |  |  |  |
Unrealized gains (losses) on investment securities, including foreign exchange | (47) |  |  | (3) |  |  | 3 |
Change in retirement benefits | — |  |  | — |  |  | — |
Credit Risk Changes to Fair Value Options | — |  |  | — |  |  | — |
Valuation allowance to equity | 41 |  |  | 1 |  |  | (3) |
Total charged to stockholders’ equity: | (6) |  |  | (2) |  |  | 1 |
Total effect of income taxes | $ | (4) |  |  | $ | 16 |  |  | $ | (1) |
Schedule of Effective Income Tax Rate Reconciliation |
Year Ended December 31, | 2022 |  | 2021 |  | 2020
Total income taxes charged to net income | $ | 2 |  |  | $ | 18 |  |  | $ | (3) |
Income taxes charged (credited) to stockholders’ equity: |  |  |  |  |
Unrealized gains (losses) on investment securities, including foreign exchange | (47) |  |  | (3) |  |  | 3 |
Change in retirement benefits | — |  |  | — |  |  | — |
Credit Risk Changes to Fair Value Options | — |  |  | — |  |  | — |
Valuation allowance to equity | 41 |  |  | 1 |  |  | (3) |
Total charged to stockholders’ equity: | (6) |  |  | (2) |  |  | 1 |
Total effect of income taxes | $ | (4) |  |  | $ | 16 |  |  | $ | (1) |
Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate The tax provisions in the accompanying Consolidated Statements of Total Comprehensive Loss reflect effective tax rates differing from prevailing Federal corporate income tax rates. The following is a reconciliation of these differences:
Year Ended December 31, | 2022 |  | 2021 |  | 2020
Tax on income (loss) at statutory rate | $ | 110 |  |  | 21 | % |  | $ | — |  |  | 21 | % |  | $ | (92) |  |  | 21 | %
Changes in expected tax resulting from: |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest | (1) |  |  | — | % |  | (2) |  |  | (114) | % |  | (2) |  |  | — | %
Foreign taxes | 4 |  |  | 1 | % |  | 8 |  |  | 448 | % |  | 6 |  |  | (1) | %
State Income Taxes | (1) |  |  | — | % |  | 14 |  |  | 794 | % |  | — |  |  | — | %
Substantiation adjustment | — |  |  | — | % |  | — |  |  | — | % |  | (29) |  |  | 7 | %
Variable Interest Entities | 25 |  |  | 5 | % |  | — |  |  | — | % |  | — |  |  | — | %
Valuation allowance | (131) |  |  | (25) | % |  | (4) |  |  | (230) | % |  | 113 |  |  | (26) | %
Other, net | (4) |  |  | (1) | % |  | 1 |  |  | 72 | % |  | 2 |  |  | — | %
Tax expense on income (loss) | $ | 2 |  |  | 1 | % |  | $ | 18 |  |  | 991 | % |  | $ | (3) |  |  | 1 | %
Schedule of Net Operating Loss And Tax Credit Carryovers | Pursuant to a 2013 Closing Agreement between Ambac and the United States Internal Revenue Service ("IRS"), AAC could have to pay as much as $8 to the IRS in the year utilized should AAC utilize $2,142 of NOLs and Interest Expense Limitation available to it as of December 31, 2022.As of December 31, 2022, the Company has (i) $3,454 of NOLs, which if not utilized will begin expiring in 2030, and will fully expire in 2043, and (ii) $314 of interest expense tax deduction carryover, which has an indefinite carryforward period but is limited in any particular year based on certain provisions. Beginning in 2022, the Company is presenting these items separately in the deferred income tax table above with conforming display in 2021.

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI https://asc.fasb.org/extlink&oid=126976462&loc=d3e36027-109320 + Details
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