041 and 051 Tax Worksheets Q3 2021

OPTIONAL WORKSHEET FOR CALCULATING CALL REPORT APPLICABLE INCOME TAXES –
FFIEC 051 and FFIEC 041
(Not to be submitted with your institution's Call Report)
For September 30, 2021
This optional worksheet is designed to assist certain institutions in the calculation of applicable income taxes
for the year-to-date reporting period ending September 30, 2021. Institutions are not required to use this
optional worksheet and may use any reasonable approach for reporting applicable income taxes in their
Consolidated Reports of Condition and Income (Call Reports) in accordance with Accounting Standards
Codification (ASC) Topic 740, Income Taxes. As discussed below, this optional worksheet provides a
simplified approach for calculating year-to-date applicable income taxes under ASC Topic 740. Thus, it
should not be used by institutions that prepare quarterly financial statements in accordance with U.S.
generally accepted accounting principles (GAAP) or where it will likely result in significantly lower applicable
income taxes than as calculated under U.S. GAAP. In addition, the worksheet should not be used by
institutions that are, for federal income tax purposes, either "S corporations" or "qualifying subchapter S
subsidiaries" as of September 30, 2021, and are generally not subject to federal corporate income taxes.
Item references on the optional worksheet are to the FFIEC 051 and the FFIEC 041 Call Reports.
NOTE: The FFIEC’s Call Report Supplemental Instructions for September 30, 2021, discuss Section 2303,
Modifications for Net Operating Losses of the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act), which makes two changes to sections of the Internal Revenue Code that were impacted by the
December 2017 Tax Cuts and Jobs Act (TCJA) related to (1) net operating loss (NOL) carryforwards and (2)
NOL carrybacks. The following discussion of these changes is taken from the Supplemental Instructions.
As stated in the Glossary entry for “Income Taxes” in the Call Report instructions, when an institution’s
deductions exceed its income for income tax purposes, it has sustained an NOL. To the extent permitted
under a taxing authority’s laws and regulations, an NOL that occurs in a year following periods when an
institution had taxable income may be carried back to recover income taxes previously paid (i.e., an NOL
carryback). Generally, an NOL that occurs when loss carrybacks are not available becomes an NOL
carryforward.
The CARES Act (1) repeals the 80 percent taxable income limitation for NOL carryback and carryforward
deductions in tax years beginning before 2021, and (2) for NOL carrybacks under federal law, allows an
institution to apply up to 100 percent of a carryback for up to five years for any NOLs incurred in taxable
years 2018, 2019, and 2020, subject to having had taxable income in the carryback years. Although the
Glossary entry for “Income Taxes” currently refers to federal law prior to the CARES Act (e.g., indicating
that, “for years beginning on or after January 1, 2018, a bank may no longer carry back operating losses to
recover taxes paid in prior tax years”), institutions that are not calendar-year taxpayers should use the
provisions of Section 2303 within the CARES Act when determining the extent to which an NOL in their 2020
taxable year that ends in 2021 may be carried forward or back.
Additionally, deferred tax assets (DTAs) are recognized for NOL carryforwards as well as deductible
temporary differences, subject to estimated realizability. As a result, an institution can recognize the tax
benefit of an NOL for accounting and reporting purposes to the extent the institution determines that a
valuation allowance is not considered necessary (i.e., realization of the tax benefit is more likely than not).
U.S. generally accepted accounting principles (GAAP) require the effect of changes in tax laws or rates to
be recognized in the period in which the legislation is enacted. Thus, in accordance with ASC Topic 740,
the effects of the CARES Act should have been recorded in an institution’s Call Report for March 31, 2020,
because the CARES Act was enacted during that reporting period. Changes in DTAs and deferred tax
liabilities (DTLs) resulting from the change in tax law for NOL carrybacks and carryforwards and other
applicable provisions of the CARES Act will be reflected in an institution’s income tax expense in the period
of enactment, i.e., the March 31, 2020, Call Report.
Institutions affected by the changes made by the CARES Act to the tax law provisions governing NOL
carrybacks and carryforwards that are not calendar-year taxpayers may wish to consult their tax advisors
when determining the effect of these

changes on the amounts to be reported for DTAs, DTLs, and the current and deferred portions of their
applicable income taxes in the September 30, 2021, Call Report..
The discussion above about the accounting for an enacted change in tax law is consistent with the
discussion of the accounting and reporting consequences of the TCJA in the banking agencies’ January
2018 Interagency Statement on Accounting and Reporting Implications of the New Tax Law and related
guidance in the agencies’ Optional Tax Worksheet for Calculating Call Report Applicable Income Taxes for
recent quarters (see, for example, the tax worksheet for December 31, 2019).
The following discussion indicates certain situations where the use of this optional worksheet is not
appropriate.
Applicable income taxes on income before discontinued operations – This optional worksheet assists in the
calculation of applicable income taxes on the amount reported in Schedule RI, item 8.c, "Income (loss)
before applicable income taxes and discontinued operations." This calculation applies to institutions that
report no amounts in Schedule RI, item 11, "Discontinued operations, net of applicable income taxes."
If your institution reports any "Discontinued operations" in Schedule RI-E, item 3, then applicable income
taxes generally must be computed on your institution's income (loss) (including both item 8.c of Schedule RI
and the "Discontinued operations" in items 3.a.(1) and 3.b.(1) of Schedule RI-E). This amount must then be
allocated between Schedule RI, item 9, "Applicable income taxes (on item 8.c)," and Schedule RI-E,
items 3.a.(2) and 3.b.(2), "Applicable income tax effect," in a reasonable and consistent manner. For
additional information, institutions should contact their assigned Call Report analyst. If you do not know the
analyst assigned to your institution, state member institutions should contact their Federal Reserve District
Bank; national institutions, FDIC-supervised banks, and savings associations should contact the FDIC's
Data Collection and Analysis Section in Washington, D.C., by telephone at (800) 688-FDIC (3342).
Reporting applicable income taxes in interim periods – Under ASC Subtopic 740-270, Income Taxes–Interim
Reporting, an institution should determine its best estimate of the institution's effective annual tax rate for the
full year, including both current and deferred portions and including all tax jurisdictions (federal, state, and
local). The institution should then use this rate as the basis for determining its total year-to-date applicable
income taxes at the interim date.
Under ASC Topic 740, an institution should estimate the current portion of its applicable income taxes for
the year based on its estimated taxes payable (receivable) on the tax return that will be prepared for the
current year. To estimate the deferred portion of its applicable income taxes, an institution should project
what its net deferred tax asset and liability (resulting from temporary differences and tax credit carryforwards
for which the tax effect is included in net income) will be at the end of the year based on its estimated
temporary differences at that date. The change in the institution's estimated net deferred tax asset or liability
(resulting from temporary differences and tax credit carryforwards for which the tax effect is included in net
income) for the year is the deferred portion of its applicable income taxes.
To arrive at the estimated annual effective tax rate, an institution should divide its estimated total applicable
income taxes (current and deferred) for the year by its estimated pretax income for the year (excluding
discontinued operations). This rate would then be applied to the year-to-date pretax income to determine
the year-to-date applicable income taxes at the interim date.

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Many institutions, or their parent holding companies, will perform the calculation of income tax expense in
accordance with ASC Topic 740, including ASC Subtopic 740-270, when preparing their quarterly GAAPbased financial statements. These institutions should determine their applicable income taxes for the
year-to-date reporting period covered by the Call Report in a similar manner. Accordingly, these institutions
should not use this worksheet.
In contrast, some institutions may not have determined their interim period income taxes using the estimated
annual effective rate. For these institutions, estimating the annual effective tax rate under the liability
method may be difficult. These institutions may find it less burdensome to estimate their year-to-date
applicable income taxes based upon their deferred tax asset or liability balances at the end of the quarter,
rather than projecting these amounts through the end of the year. This optional worksheet follows this
approach. An institution may use this approach if it will not likely result in significantly lower year-to-date
applicable income taxes than as calculated under ASC Topic 740, including ASC Subtopic 740-270.
Otherwise, an institution should follow some other reasonable approach for calculating applicable income
taxes in interim periods in accordance with ASC Topic 740, including ASC Subtopic 740-270.
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CALCULATION OF SCHEDULE RI, ITEM 9, "APPLICABLE INCOME TAXES (ON ITEM 8.c)" UNDER
THE REGULAR CORPORATE TAX SYSTEM [Applicable income taxes on Item 8.c include both amounts
currently due (or refundable) calculated in Section A and deferred income taxes calculated in Section B.]
A.

Income taxes due (refundable) for the year to date
(i.e., current portion of applicable income taxes)

A.1. Schedule RI, Item 8.c, "Income (loss) before applicable income taxes and
discontinued operations" .................................................................................................... __________
A.2. Schedule RI, Memorandum Item 3, "Income on tax-exempt loans
and leases to states and political subdivisions in the U.S." ............................................... (–) ________
A.3. Schedule RI, Memorandum Item 4, "Income on tax-exempt securities
issued by states and political subdivisions in the U.S."...................................................... (–) ________
A.4. Other income included in Schedule RI, Items 1, 5, and 6, (if any) which is
not subject to federal income taxes during the current period ........................................... (–) ________
A.5. Other income not included in Schedule RI, Item 8.c, (if any) which is subject to
federal income taxes during the current period .................................................................. (+) ________
A.6. For institutions filing the FFIEC 041 Call Report only, Schedule RI, Memorandum
Item 1, "Interest expense incurred to carry tax-exempt securities, loans, and leases
acquired after August 7, 1986, that is not deductible for federal income tax purposes" .... (+) ________
A.7. All other expenses included in Schedule RI, Item 8.c, that are not deductible
for federal income tax purposes in the current period (for institutions filing the
FFIEC 051 Call Report, include nondeductible interest expense incurred to carry
tax-exempt securities, loans, and leases acquired after August 7, 1986) ......................... (+) ________
A.8. Other expenses not included in Schedule RI, Item 8.c, that are deductible for
federal income tax purposes in the current period ............................................................. (–) ________
A.9. Year-to-date income currently subject to federal income taxes before state
and local income taxes (Line A.1 minus Lines A.2, A.3, A.4, and A.8,
plus Lines A.5, A.6, and A.7) .............................................................................................. __________

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9/30/2021 CALL REPORT TAX WORKSHEET

A.10. State and local income taxes due (refundable) for the year to date
(If the state and local tax laws applicable to your institution do not differ
significantly from federal income tax laws, an estimate of state and local
income taxes can be obtained by multiplying Line A.9 by the applicable
state and local income tax rate.) ........................................................................................ (–) ________
A.11. Year-to-date federal taxable income (Line A.9 minus Line A.10) ...................................... __________
__x 1.33____
A.12. Annualized federal taxable income (Line A.11 multiplied by 1.33) .................................... __________
A.13. Net operating loss (NOL) carryforwards available at January 1, 2021, to offset annualized federal
taxable income (amount reported on this line should not exceed the amount
reported on Line A.12) .................................................................................................. __________
A.14. Annualized income currently subject to federal income taxes
(Line A.12 minus Line A.13) ............................................................................................... __________
x 0.21___
A.15. Annualized federal income taxes currently due (refundable) on amount
shown on Line A.14 (Line A.14 multiplied by 0.21) ........................................................... __________
x 0.75___
A.16. Year-to-date federal income taxes currently due (refundable) on amount
shown on Line A.15 (Line A.15 multiplied by 0.75) ............................................................ __________
A.17. Year-to-date federal income tax credits (if any) ................................................................. (–) ________
A.18. State and local income taxes due (refundable) for the year to date
(from Line A.10 above) ....................................................................................................... (+) ________
A.19. Total income taxes currently due (refundable) for the year to date
(Line A.16 minus Line A.17 plus Line A.18) ....................................................................... __________
B.

Deferred income tax expense (benefit) for the year to date
(i.e., deferred portion of applicable income taxes)
This section provides guidance for the determination of the deferred portion of applicable income
taxes for the year to date under ASC Topic 740. This calculation considers federal, state, and local
income taxes.
Deferred income tax expense (benefit) for the reporting period ending September 30, 2021, is
generally measured in this worksheet as the change in the institution's net deferred tax assets or
liabilities during the year-to-date period. Therefore, your institution should calculate its net deferred
tax assets/liabilities at September 30, 2021, and compare this amount to the amount of your
institution's net deferred tax assets/liabilities at December 31, 2020. A portion of the difference
between these two amounts will be the deferred income tax expense (benefit) for the reporting period
ending September 30, 2021. The remainder of the change in the net deferred tax assets/liabilities for
the period generally should be charged or credited to “Other comprehensive income” (Schedule RI-A,
item 10) [and, hence, to the “Accumulated other comprehensive income” component of equity capital
(Schedule RC, item 26.b) that includes your institution’s "Net unrealized holding gains (losses) on
available-for-sale debt securities"]. The following steps assist in the calculation of these amounts.

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9/30/2021 CALL REPORT TAX WORKSHEET

B.1. Identify types and amounts of temporary differences
Temporary differences essentially consist of all differences between the book and tax basis of an
institution's assets and liabilities. In identifying these basis differences, an institution should consider
assets and liabilities that may not exist on its books (such as repairs capitalized for tax purposes but
expensed on the institution's books and Call Report) as well as assets and liabilities that have no tax
basis (such as gains deferred on the institution's books and Call Report which have been recognized
for tax purposes).
To ensure all temporary differences are identified, institutions should consider preparing a
comprehensive tax-basis balance sheet and comparing it to the balance sheet on the institution's
Call Report. As these differences are identified, the institution should categorize these amounts as
deductible or taxable temporary differences. Also, institutions should not include those book-tax basis
differences that are not considered temporary differences under ASC Topic 740. One such example
is the excess of the cash surrender value of life insurance over premiums paid (if the policy will be
held until the death of the insured).
Refer to the Glossary entry for "Income Taxes" in the Call Report instructions and to ASC Topic 740
for additional information about temporary differences.
Listed below are some of the assets and liabilities that are frequently reported differently on an
institution's federal income tax return than they are on the institution's books and Call Report. A booktax basis difference for a particular asset or liability may result from one or more temporary
differences.
Under ASC Topic 740, the tax effects of most temporary differences are included in an institution's
net income. However, the tax effects of certain items specified by ASC Topic 740 are charged or
credited to other comprehensive income (which is outside of net income) and from there to a
component of an institution's equity capital. The principal item of this type is identified separately
below to assist institutions in properly recording their income tax amounts under ASC Topic 740.
Some of the items listed below may not involve temporary differences at your institution. Similarly,
there may be other differences that exist in your institution that are not listed below. Institutions should
ensure that they properly identify the appropriate differences specific to their institution.
An institution that can reasonably determine its tax basis balance sheet at September 30, 2021, may
use the approach in Section B.1.a. to identify some of its temporary differences. If the tax basis
balance sheet information at September 30, 2021, is not readily available, the institution may use the
approach in Section B.1.b. to provide a reasonable estimate of the temporary differences at that date.
Any institution using Section B.1.b. should ensure that the estimation method used for each temporary
difference is appropriate for its facts and circumstances. Otherwise, the institution should make
appropriate adjustments to Section B.1.b. or else use Section B.1.a. All institutions should complete
Section B.1.c. for any other significant temporary differences.
B.1.a. Differences in book-tax basis approach (COMPLETE ONLY IF A TAX-BASIS BALANCE SHEET IS
PREPARED OR AVAILABLE)
Under this approach, record your institution's book and tax bases for the six accounts listed in the
following chart. Subtract the tax basis from the book basis to arrive at the difference. Then identify
whether the difference is a taxable or deductible temporary difference. Note that a debit (Dr)
difference indicates a taxable (T) temporary difference. A credit () difference indicates a
deductible () temporary difference.

-6B.1.a.1.

(1)

9/30/2021 CALL REPORT TAX WORKSHEET

Temporary differences for which the tax effect is charged or credited to other comprehensive
income (and, hence, to the accumulated other comprehensive income component of equity
capital):
[A]
[B]
[A]-[B]
Book
Tax
DifferBasis
Basis
ence
Type
Dr
Dr
Dr
T
Available-for-sale debt securities
recorded at fair value on the books
and Call Report but recorded at
amortized cost on the tax return
An institution's available-for-sale debt securities, while reported at fair value on the books and the
Call Report, may or may not be reported at fair value (i.e., "marked to market") on the institution's tax
return. Institutions should consult their tax advisors when determining the tax status of their
available-for-sale portfolio. If an institution's available-for-sale debt securities are reported differently
on the books and Call Report than they are on an institution's tax return, the difference between the
book basis and the tax basis of these debt securities results in a temporary difference and gives rise
to a deferred tax asset or liability.
If an institution's available-for-sale debt securities are also "marked-to-market" on an institution's tax
return, there would be no difference between the book and tax basis of these debt securities.
Rather, the amount of the adjustment needed to reflect these debt securities at their fair value would
be included in the institution's current period taxable income. The tax effect of this "mark-to-market"
adjustment would be part of taxes currently due or refundable.

B.1.a.2. Temporary differences for which the tax effect is included in net income:

(2)

Loans
[e.g., difference due to origination
fees and costs deferred and recognized
over the life of the loan on the books
and Call Report but recognized when
received and paid on the tax return]

(3)

Allowance for loan and lease losses (on
the books and Call Report)/Tax
bad debt reserve (on the tax return) 1

(4)

Other real estate owned
[e.g., difference due to writedowns
and valuation allowances reflected
on the books and Call Report that are
not recorded against the tax basis
until disposition of the property]

[A]
Book
Basis
Dr

[B]
Tax
Basis
Dr

[A]-[B]
Difference
Dr

Type
T

Savings institutions that previously took bad debt deductions for tax purposes using the percentage-of-taxable-income
method set forth in Section 593 of the Internal Revenue Code should treat the book allowance for loan and lease losses
as a deductible temporary difference and the excess, if any, of the tax bad debt reserve (that has not yet been
recaptured) over the base year reserve balance (generally 1987) as a taxable temporary difference, rather than treating
the allowance and the tax bad debt reserve as one difference.

1

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(5)

Premises and equipment, net
[e.g., difference due to different
depreciation methods and rates for
book and tax purposes]

(6)

Interest earned, not collected
on loans
[e.g., difference due to interest
on nonaccrual loans not recorded
on books and Call Report but
recognized on the tax return]

(7)

Equity securities with readily determinable
fair values not held for trading
[e.g., difference due to equity securities
recorded at fair value on the books and Call
Report but recorded on a cost basis on the
tax return]

9/30/2021 CALL REPORT TAX WORKSHEET

[A]
Book
Basis
Dr

[B]
Tax
Basis
Dr

[A]-[B]
Difference
Dr

Type
T

B.1.b. Rollforward of Temporary Differences Approach (DO NOT COMPLETE IF SECTION B.1.a.
WAS COMPLETED)
NOTE: Changes in temporary differences from December 31, 2020, need only be considered if they
are significant in amount. If a change is not significant, use the amount of the temporary difference
as of December 31, 2020, in the 9/30/21 Temporary Difference column. Note that a debit (Dr)
difference indicates a taxable (T) temporary difference. A credit () difference indicates a
deductible () temporary difference.
B.1.b.1.

(1)

Temporary differences for which the tax effect is charged or credited to other comprehensive
income (and, hence, to the accumulated other comprehensive income component of equity
capital):
9/30/21
Temporary
Difference
Type
Dr
Dr
T
Available-for-sale debt securities
(To be completed only if available-for-sale debt
securities are reported differently on the books
and Call Report than on the tax return):
Balance (at fair value) of available-for-sale debt securities
on books and Call Report at 9/30/21
Less: Amortized cost of available-for-sale
debt securities at 9/30/21
Estimated 9/30/21 temporary difference
NOTE: See the discussion of available-for-sale debt securities in Section B.1.a.1 above. Institutions
should consult their tax advisors when determining the tax status of their available-for-sale
securities.

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9/30/2021 CALL REPORT TAX WORKSHEET

B.1.b.2. Temporary differences for which the tax effect is included in net income:

(2)

Loans:
Difference at 9/30/21 approximates the amount of
deferred loan fee income, net of deferred loan
origination costs, on books and Call Report at 9/30/21

(3)

Allowance for loan and lease losses: 2

Dr

9/30/21
Temporary
Difference
Dr

Type
T

For institutions on the specific charge-off method for tax
purposes (i.e., for institutions with no tax bad debt
reserve):
Difference at 9/30/21 approximates the balance of the
allowance for loan and lease losses on books and
Call Report at 9/30/21
For institutions on the reserve method for tax purposes:
Temporary difference at 12/31/20 T
Less: Provision for loan and lease losses on books
and Call Report year to date
Plus: Estimated additions to tax reserve year to date*
Estimated 9/30/21 temporary difference
* Generally, this amount may be estimated by multiplying
the addition to the institution's tax reserve for 2020 by
0.75.
(4)

Other real estate owned:
Choose the method from (a) and (b) below that is
appropriate for your institution. Do not complete both (a)
and (b).
(a) Balance of other real estate owned valuation
allowances on books and Call Report at 9/30/21 T
(b) Temporary difference at 12/31/20 T
Less: Provisions taken year to date on books and
Call Report for properties held on 9/30/21
Plus: Amount of writedowns taken before 1/1/20 on
books for properties sold year to date
Estimated 9/30/21 temporary difference

2 Savings institutions that previously took bad debt deductions for tax purposes using the percentage-of-taxable-income
method set forth in Section 593 of the Internal Revenue Code should treat the book allowance for loan and lease losses
as a deductible temporary difference and the excess, if any, of the tax bad debt reserve (that has not yet been
recaptured) over the base year reserve balance (generally 1987) as a taxable temporary difference, rather than treating
the allowance and the tax bad debt reserve as one difference.

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(5)

9/30/2021 CALL REPORT TAX WORKSHEET

Premises and equipment, net:

Dr

9/30/21
Temporary
Difference
Dr

Type
T

Temporary difference at 12/31/20 T
Less: Depreciation recorded on books and
Call Report year to date
Plus: Estimated tax depreciation year to date*
Plus/less: Estimate of difference in book and tax basis
of fixed assets sold year to date
Estimated 9/30/21 temporary difference
* Generally, this amount may be estimated by
multiplying 2020 tax depreciation by 0.75.
(6)

Interest earned not collected on nonaccrual loans:
Temporary difference at 12/31/20 T
Plus: Estimated additional interest on
nonaccrual loans year to date
Less: Interest received on nonaccrual
loans year to date
Estimated 9/30/21 temporary difference

(7)

Equity securities with readily determinable fair values not
held for trading
(To be completed only if such equity securities
are reported differently on the books and Call Report
than on the tax return):
Balance (at fair value) of equity securities with
readily determinable fair values not held for
trading on books and Call Report at 9/30/21
Less: Cost basis of equity securities with
readily determinable fair values not
held for trading at 9/30/21
Estimated 9/30/21 temporary difference

B.1.c. Other temporary differences (TO BE COMPLETED BY ALL INSTITUTIONS USING WORKSHEET)
If the institution has other material temporary differences, include those differences below. Indicate
whether these other temporary differences are taxable or deductible temporary differences. In
addition, any differences for which the tax effect is charged or credited to other comprehensive
income (and, hence, to the accumulated other comprehensive income component of equity capital)
should be designated accordingly.
Examples of other temporary differences include: accrued liabilities or prepaid expenses recorded
differently on the books and Call Report than reported on the tax return, differences in the basis of
assets and liabilities resulting from business combinations, equity investments without readily
determinable fair values reported differently on the books and Call Report than on the tax return,
investments in stock of unconsolidated subsidiaries (undistributed earnings recognized on the books
and Call Report but not in the tax return), and intangible assets which have different amortization
periods and/or methods used in the tax return than those used on the books and Call Report.

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9/30/2021 CALL REPORT TAX WORKSHEET

Note that a debit (Dr) difference indicates a taxable (T) temporary difference. A credit ()
difference indicates a deductible () temporary difference.

Other temporary differences:

[A]
Book
Basis
Dr

[B]
Tax
Basis
Dr

[A]-[B]
Difference
Dr

Type
T

B.2. Total temporary differences
a. Total taxable temporary differences for which the tax effect is included
in net income (sum of appropriate taxable temporary differences, i.e.,
differences marked "T," identified in Section B.1) ........................................................ __________
b. Total taxable temporary differences for which the tax effect is charged
or credited to other comprehensive income (sum of appropriate taxable
temporary differences, i.e., differences marked "T," identified in Section B.1) ........... __________
c. Total deductible temporary differences for which the tax effect is
included in net income (sum of appropriate deductible temporary
differences, i.e., differences marked "," identified in Section B.1.
Ignore negative signs.) ................................................................................................. __________
d. Total deductible temporary differences for which the tax effect is charged
or credited to other comprehensive income (sum of appropriate deductible
temporary differences, i.e., differences marked "," identified in Section B.1.
Ignore negative signs.) ................................................................................................ __________
B.3. Identify remaining tax carryforwards (add additional lines for additional carryforwards, if necessary)
a. Net operating loss (NOL) carryforwards 3
Year NOL Originated ________
Year NOL Originated ________

Amount....... ____________
Amount....... ____________
Total ........... ____________

In determining the amount of NOL carryforwards, your institution should consider the effect of
any NOL carryforwards used in Section A to reduce taxes currently due. If any amounts
were reported in Line A.13, the amount to be reported here can be estimated with the
following calculation:
NOL carryforwards available at 1/1/20 less
[(the amount of NOL carryforwards estimated to
be used per Line A.13) x (0.75)]
b. Tax credit carryforwards
Expiration Date ____________
Expiration Date ____________

3

In general, the 2017 TCJA makes the NOL carryforward period indefinite.

Amount....... ____________
Amount....... ____________
Total ........... ____________

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B.4. Calculate deferred tax liability for federal income tax purposes at September 30, 2021.
a. Total taxable temporary differences for which the tax effect is included
in net income (from Line B.2.a) ................................................................................... __________
b. Deferred tax liability resulting from taxable temporary differences for
which the tax effect is included in net income (Line B.4.a multiplied by
the tax rate expected to apply when the amount of taxable temporary
differences result in additional taxable income in future periods) 4 ............................... __________
c. Total taxable temporary differences for which the tax effect is charged
or credited to other comprehensive income (from Line B.2.b) .................................... __________
d. Deferred tax liability resulting from taxable temporary differences for
which the tax effect is charged or credited to other comprehensive income
(Line B.4.c multiplied by the tax rate expected to apply when the amount
of taxable temporary differences result in additional taxable income in
future periods)4 ............................................................................................................. __________
e. Total deferred tax liability for federal income tax purposes at
September 30, 2021 (Line B.4.b plus Line B.4.d) ........................................................ __________
B.5. Calculate deferred tax asset for federal income tax purposes at September 30, 2021.
a. Total deductible temporary differences for which the tax effect is
included in net income (from Line B.2.c) ...................................................................... __________
b. Deferred tax asset resulting from deductible temporary differences for
which the tax effect is included in net income (Line B.5.a multiplied by the
tax rate expected to apply when the amount of deductible temporary
differences are used to reduce taxable income in future periods)4 ............................. __________
c. Deferred tax asset resulting from net operating loss carryforwards
(Line B.3.a multiplied by the tax rate expected to apply when the
net operating loss carryforwards are utilized in future periods)4 ................................. (+) ________
d. Tax credit carryforwards available to reduce taxes payable in future
periods (from Line B.3.b) ............................................................................................. (+) ________
e. Total deferred tax assets for which the tax effect is included in
net income (Line B.5.b plus Line B.5.c plus Line B.5.d) ............................................... __________
f.

Total deductible temporary differences for which the tax effect is charged
or credited to other comprehensive income (from Line B.2.d) ..................................... __________

Under current tax law, the federal tax rate expected to apply for tax years beginning on or after January 1, 2018,
is 21 percent. Refer to the discussion of the "applicable tax rate" in the Glossary entry for "Income Taxes" in the
Call Report instructions and to footnote 6 on page 13 of this worksheet for further information.

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g. Deferred tax asset resulting from deductible temporary differences for
which the tax effect is charged or credited to other comprehensive income
(Line B.5.f multiplied by the tax rate expected to apply when the amount
of deductible temporary differences are used to reduce taxable income
in future periods)5 ......................................................................................................... __________
h. Total deferred tax assets for federal income tax purposes before
valuation allowance, if any (Line B.5.e plus Line B.5.g) ............................................... __________
B.6. Assessing the need for a valuation allowance
Institutions must consider all available evidence, both positive and negative, in assessing the need for
a valuation allowance to reduce the total deferred tax assets for federal income tax purposes in
Line B.5.h to the amount that is more likely than not to be realized. The future realization of deferred
tax assets ultimately depends on the existence of sufficient taxable income of the appropriate
character in either the carryback or carryforward period. Four sources of taxable income may be
available to realize deferred tax assets:
(1)
(2)
(3)
(4)

Taxable income in carryback years (which can be offset to recover taxes previously paid),
Reversing taxable temporary differences,
Future taxable income (exclusive of reversing temporary differences and carryforwards), and
Tax-planning strategies.

In general, positive evidence refers to the existence of one or more of the four sources of taxable
income. To the extent evidence about one or more sources of taxable income is sufficient to support a
conclusion that a valuation allowance is not necessary (i.e., the institution can conclude that the
deferred tax asset is more likely than not to be realized), other sources need not be considered.
However, if a valuation allowance is needed, each source of income must be evaluated to determine
the appropriate amount of the allowance needed.
Evidence used in determining the valuation allowance should be subject to objective verification. The
weight given to evidence when both positive and negative evidence exist should be consistent with the
extent to which it can be objectively verified. Under ASC Topic 740, the existence of a cumulative loss
for the prior three years is significant negative evidence that would be difficult for an institution to
overcome.
Refer to the discussion of the "valuation allowance" in the Glossary entry for "Income Taxes" in the
Call Report instructions for further information.
Line B.6:
Valuation allowance to reduce the total deferred tax assets for federal
income tax purposes in Line B.5.h to the amount that is more likely
than not to be realized ....................................................................................................... (–) ________
B.7. Deferred tax asset for federal income tax purposes, net of valuation
allowance, at September 30, 2021 (Line B.5.h minus Line B.6) ........................................ __________
B.8. Net deferred tax asset (liability) for federal income tax purposes at September 30,
2021 (Line B.7 minus Line B.4.e) (Report this amount in Schedule RC-F,
Item 2, or Schedule RC-G, Item 2, as appropriate) .......................................................... __________

Under current tax law, the federal tax rate expected to apply for tax years beginning on or after January 1, 2018,
is 21 percent. Refer to the discussion of the "applicable tax rate" in the Glossary entry for "Income Taxes" in the
Call Report instructions and to footnote 6 on page 13 of this worksheet for further information.

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B.9. Net deferred tax asset (liability) for which the tax effect is included in
net income for federal income tax purposes at September 30, 2021 [Line B.5.e
minus (the lesser of Line B.5.e and Line B.6) minus Line B.4.b] ...................................... __________
B.10. Net deferred tax asset (liability) for which the tax effect is included in net
income for federal income tax purposes at December 31, 2020 [This
amount is from Line B.9 of the 12/31/20 Call Report tax worksheet.] ................................ __________
B.11. Year-to-date deferred income tax expense (benefit) for federal income tax
purposes (determined as the change for the period in the net deferred tax
asset or liability for which the tax effect is included in net income)
(Line B.10 minus Line B.9) ................................................................................................. __________
NOTE: The change in an institution's net deferred tax asset (liability) for which
the tax effect is charged or credited to other comprehensive income (and, hence,
to the accumulated other comprehensive income component of equity capital)
is not reported as part of an institution's deferred income tax expense (benefit)
in the income statement.
B.12. Year-to-date deferred income tax expense (benefit) for state and local tax
purposes. This amount must be computed if the tax laws of the institution's
state and local tax authorities differ significantly from the federal tax laws.6
Compute this amount by performing the calculation outlined in Lines B.1
through B.11, considering only deferred tax asset and liability amounts for
state and local income tax purposes .................................................................................. __________
B.13. Year-to-date total deferred income tax expense (benefit) for the reporting
period covered by Schedule RI, item 8.c, "Income (loss) before applicable
income taxes and discontinued operations" (Line B.11 plus Line B.12) ............................(+) ________
B.14. Year-to-date applicable income taxes (on Schedule RI, item 8.c). Includes both
applicable current and deferred income tax expense (benefit) for the year to
date (Line A.19 plus Line B.13). Record this amount on Schedule RI, item 9 .................. __________

In assessing whether a separate calculation is necessary, the institution should consider any differences in loss
carryback or carryforward periods, or in other provisions of the tax law. If the tax laws of the state and local jurisdictions
do not differ significantly from federal income tax laws, then the calculation of deferred income tax expense (benefit) can
be made in the aggregate. The institution would complete Lines B.1 through B.11 on the worksheet considering both the
federal and state and local income tax rates. The rate used should consider whether amounts paid in one jurisdiction
are deductible in another jurisdiction. For example, since state and local taxes are deductible for federal corporate
income tax purposes, the aggregate combined rate generally would be (1) the federal tax rate plus (2) the state and local
tax rate minus (3) the federal tax effect of the deductibility of the state and local taxes at the federal corporate tax rate.

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