INCOME TAXES

4 Months Ended

May 22, 2021

INCOME TAXES

INCOME TAXES

9. INCOME TAXES

The effective income tax rate was 20.2% in the first quarter of 2021 and 23.5% in the first quarter of 2020.  The effective income tax rate for the first quarter of 2021 differed from the federal statutory rate due to the utilization of tax credits and deductions, partially offset by the effect of state income taxes. The effective income tax rate decreased in the first quarter of 2021, compared to the first quarter of 2020, due to lower pre-tax income in 2021, which increases the favorable impact of tax credits and deductions and reduces the impact of state income taxes.  The effective income tax rate for the first quarter of 2020 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020, includes measures to assist companies in response to the COVID-19 pandemic. These measures include deferring the due dates of tax payments and other changes to income and non-income-based tax laws. As permitted under the CARES Act, the Company deferred the remittance of the employer portion of the social security tax. The social security tax provision requires that the deferred employment tax be paid over two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. During 2020, the Company deferred the employer portion of social security tax of $622. Of the total, $311 is included in “Other current liabilities” and $311 is included in “Other long-term liabilities” in the Company’s Consolidated Balance Sheets.