INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 – INCOME TAXES

The income tax expense was composed as follows:

	Year Ended December 31,
(In thousands)	2024			2023			2022
Current:
Federal	$	31		$	—		$	—
Current state and local		477			389			362
Total current		508			389			362
Deferred:
Federal deferred		(200	)		(259	)		(125	)
State deferred		—			—			—
Total deferred		(200	)		(259	)		(125	)
Total Income Tax Expense	$	308		$	130		$	237

The following table is a reconciliation of the U.S. statutory income tax rate to the effective income tax rate included in the accompanying Consolidated Income Statements:

	Year Ended December 31,
	2024			2023			2022
U.S. statutory rate		21.0	%		21.0	%		21.0	%
Current benefit		(20.9	)		(20.9	)		(20.8	)
State and local income taxes, net of federal tax benefits		0.4			0.4			0.3
Benefit of federal income tax credits		(0.2	)		(0.3	)		(0.2	)
Other		—			(0.1	)		(0.1	)
Valuation allowance		—			—			—
Permanent differences		—			—			—
Effective Income Tax Rate		0.3	%		0.1	%		0.2	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods.

The tax effects of temporary differences that gave rise to deferred tax assets and liabilities were as follows:

	December 31,
(In thousands)	2024			2023			2022
Compensation and employee benefits	$	35		$	33		$	32
Charitable contribution and credit carryforwards		1,877			1,704			1,366
Net operating losses		—			15			60
Lease payable		147			144			141
UNICAP		13			14			15
Gross deferred tax assets		2,072			1,910			1,614
Prepaid expenses		(13	)		—			(14	)
Buildings and equipment (1)		(611	)		(662	)		(612	)
Gross deferred tax liabilities		(624	)		(662	)		(626	)
Net Deferred Tax Assets	$	1,448		$	1,248		$	988

(1)These buildings and equipment in 2024, 2023, and 2022 relate to the Kerrow Restaurant Operating Business.