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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes During the years ended December 31, 2020, 2019 and 2018, the Company recognized income tax expense (benefit) of $6.6 million, $(30,000) and $37,000 resulting in effective tax rates of (7.2)%, (0.1)% and 0.1%, respectively. The Company’s income tax expense for the year ended December 31, 2020 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the impact of the change in fair value of the carrying amount of the contingent consideration being recorded in the Company’s statements of operations and comprehensive income (loss). The Company’s income tax expense for the years ended December 31, 2019 and 2018 differs from amounts computed by applying the U.S. federal statutory tax rate of 21% primarily due to the flow-thru entity structure prior to the Business Combination. Net deferred tax assets totaling $89.9 million were recorded as of June 10, 2020 in relation to the Business Combination, of which $88.1 million was recorded to other non-current liabilities to reflect the Company’s estimated liability associated with the Tax Receivable Agreement, dated June 10, 2020, by and among Nebula, the Blocker, Blocker’s sole shareholder, and Open Lending, LLC and the excess amount of $1.9 million was recorded to additional paid-in capital. The Company’s income tax expense (benefit) attributable to operations are as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
Current tax expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,234 |  |  | $ | — |  |  | $ | — |
State |  |  | 605 |  |  |  | (30 | ) |  |  | 37 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 7,463 |  |  |  | — |  |  |  | — |
State |  |  | (2,729 | ) |  |  | — |  |  |  | — |
Income tax expense |  | $ | 6,573 |  |  | $ | (30 | ) |  | $ | 37 |
The components of the Company’s income tax expense are as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |  |  | (rate reconciliation) |  |  | (in thousands) |  |  | (rate reconciliation) |  |  | (in thousands) |  |  | (rate reconciliation) |
Income tax benefit computed at the statutory rate |  | $ | (19,102 | ) |  |  | 21.0 | % |  | $ | 13,128 |  |  |  | 21.0 | % |  | $ | 5,946 |  |  |  | 21.0 | %
State income taxes |  |  | (1,706 | ) |  |  | 1.9 | % |  |  | (30 | ) |  |  | (0.1 | )% |  |  | 37 |  |  |  | 0.1 | %
Income not subject to federal taxes |  |  | — |  |  |  | — | % |  |  | (13,128 | ) |  |  | (21.0 | )% |  |  | (5,946 | ) |  |  | (21.0 | )%
Contingent consideration |  |  | 27,706 |  |  |  | (30.5 | )% |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Other |  |  | (325 | ) |  |  | 0.4 | % |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Income tax expense |  | $ | 6,573 |  |  |  | (7.2 | )% |  | $ | (30 | ) |  |  | (0.1 | )% |  | $ | 37 |  |  |  | 0.1 | %
The components of the Company’s deferred tax assets and liabilities are as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Deferred tax assets |  |  |  |  |  |  |  |
Investment in Lender’s Protection, LLC |  | $ | 85,219 |  |  | $ | — |
Operating lease liability |  |  | 1,394 |  |  |  | — |
Share-based compensation |  |  | 37 |  |  |  | — |
Other |  |  | 20 |  |  |  | — |
Deferred tax assets |  | $ | 86,671 |  |  | $ | — |
Deferred tax liabilities |  |  |  |  |  |  |  |
Operating lease asset |  | $ | (1,453 | ) |  | $ | — |
Deferred tax liabilities |  | $ | (1,453 | ) |  | $ | — |
Net deferred tax assets |  | $ | 85,218 |  |  | $ | — |
As of December 31, 2020, the Company has assessed whether it is more likely than not that our deferred tax assets will be realized. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, the reversal of its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. The Company believes it is more-likely-than-not all deferred tax assets will be realized and has not recorded any valuation allowance as of December 31, 2020. On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), an economic stimulus package in response to the COVID-19 pandemic. The CARES Act contains several corporate income tax provisions intended to provide relief to taxpayers, most substantial of which relate to temporary net operating loss (“NOL”) carryback periods, temporary reductions in the limitation of business interest expense deductions, employee retention tax credits, and payroll tax relief, among other changes. As of December 31, 2020, the CARES Act provisions did not have a material impact on the Company’s current year provision or the consolidated financial statements. Management of the Company has evaluated the aggregate exposure for uncertain tax positions for all open tax years and concluded that the Company and its predecessor have no material uncertain tax positions as of December 31, 2020 or for any open tax years. Tax penalties and interest are reflected in the consolidated statements of operations and comprehensive income (loss) in other expenses. The Company has not recorded any penalties or interest related to uncertain tax positions as of December 31, 2020 or for any open tax years.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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