Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of the Company's income before income taxes are as follows:

	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
United States	$	102,200	$	255,661	$	132,809
Foreign	694		664		399
Income before income taxes	$	102,894	$	256,325	$	133,208

 The components of the Company’s income tax expense are as follows:

	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
Current:
Federal	$	19,871	$	48,664	$	5,165
State	8,940		13,919		5,638
Foreign	148		219		330
Total	28,959		62,802		11,133
Deferred:
Federal	554		383		892
State	596		4,623		(10,648)
Foreign	154		56		(171)
Total	1,304		5,062		(9,927)
Income tax expense	$	30,263	$	67,864	$	1,206

Deferred income taxes reflect the Company's net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2023		2022
	(amounts in thousands)
Deferred Tax Assets:
Accrued other and prepaid expenses	$	912	$	96
Allowance for doubtful accounts	5,321		3,471
Intangible assets	7,072		7,518
Net operating loss carryforwards	1,054		1,389
Accrued professional liability	851		1,118
Accrued workers’ compensation	3,097		3,631
Share-based compensation	1,197		992
Operating lease liabilities	1,319		2,228
Credit carryforwards	—		1
Other	1,016		630
Gross deferred tax assets	21,839		21,074
Valuation allowance	(2)		(2)
	21,837		21,072
Deferred Tax Liabilities:
Depreciation	(967)		(1,411)
Indefinite-lived intangibles	(14,296)		(11,829)
Operating lease right-of-use assets	(620)		(740)
Tax on unrepatriated earnings	(401)		(247)
	(16,284)		(14,227)
Net deferred taxes	$	5,553	$	6,845

As of December 31, 2023 and 2022, the Company had immaterial valuation allowances on its deferred tax assets.

As of December 31, 2023, the Company had approximately $22.9 million of state net operating loss carryforwards, and an immaterial amount of foreign net operating loss carryforwards. The NOLs expire as follows: state between 2024 and 2041 and foreign between 2024 and 2028. As a result of the 2017 Tax Act, certain state NOLs generated in 2020, 2019, and 2018 carry forward indefinitely.

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense is as follows:

	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
Tax at U.S. statutory rate	$	21,608	$	53,828	$	27,974
State taxes, net of federal benefit	6,834		15,423		8,573
Noncontrolling interest	—		—		(5)
Non-deductible items(a)	573		179		550
Foreign tax expense	155		136		76
Valuation allowances	1		1		(37,450)
Uncertain tax positions	2,771		(1,694)		1,891
Officers' compensation	(275)		404		344
Return to provision	(482)		(169)		44
Other	(922)		(244)		(791)
Income tax expense	$	30,263	$	67,864	$	1,206

________________

(a) Includes non-deductible meals and incidentals and other miscellaneous non-deductible items.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: 

	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
Balance at January 1	$	7,581	$	9,179	$	6,891
Additions based on tax positions related to the current year	2,737		349		1,873
Additions (reductions) based on tax positions related to prior years	59		(1,947)		—
Reductions as a result of a lapse of applicable statute of limitations	—		—		(47)
Other	—		—		462
Balance at December 31	$	10,377	$	7,581	$	9,179

There were no short-term unrecognized tax benefits as of December 31, 2023 and 2022. Long-term unrecognized tax benefits, including interest, are presented in uncertain tax positions in the consolidated balance sheets and were $10.6 million and $7.6 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the Company had unrecognized tax benefits, which would affect the effective tax rate if recognized, of $10.0 million and $7.2 million, respectively.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2023, 2022, and 2021, accruals for the payment of interest and penalties were immaterial. Tax years 2012 through 2023 remain open to examination by certain taxing jurisdictions.

An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward if such carryforward would offset the disallowance of the tax position. As a result of the Company’s utilization of its federal net operating loss carryforward and a material amount of state net operating loss carryforwards, the Company reclassified $0.4 million of unrecognized tax benefits from deferred tax assets to long-term liabilities in the year ended December 31, 2022. Further, for the year ended December 31, 2021, the Company reclassified $0.5 million, representing the federal benefit of state unrecognized tax benefits, in the tabular rollforward from unrecognized tax benefits to deferred tax assets.