Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 — Income Taxes

The following table summarizes the provision for income taxes:

	Year Ended December 31,
	2020		2019		2018
	(amounts in thousands)
Current:
Federal	$	28,833	$	15,041	$	23,407
State	7,564		6,158		5,992
	$	36,397	$	21,199	$	29,399
Deferred:
Federal	$	(4,903)	$	(824)	$	(9,526)
State	(990)		140		(3,487)
	$	(5,893)	$	(684)	$	(13,013)
Tax provision	$	30,504	$	20,515	$	16,386

Deferred income taxes are recorded using the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities.

Significant components of the Company’s federal and state deferred tax asset and liability balances were as follows:

	Year Ended December 31,
	2020		2019
	(in thousands)
Deferred tax assets:
Allowance for doubtful accounts	$	16,672	$	13,376
Deferred compensation	8,239		8,074
Deferred payroll taxes under the CARES Act	11,914		—
Accrued insurance claims	5,189		4,902
Non-deductible reserves	309		489
Leases	181		—
Other	1,466		1,641
	$	43,970	$	28,482
Deferred tax liabilities:
Expensing of housekeeping supplies	$	(3,322)	$	(3,796)
Amortization of intangibles	(574)		(218)
Depreciation of property and equipment	(1,725)		(1,969)
Leases	—		(96)
Other	(2,795)		(2,039)
	$	(8,416)	$	(8,118)
Net deferred tax assets	$	35,554	$	20,364

Realization of the Company’s deferred tax assets is dependent upon future earnings in specific tax jurisdictions, the timing and amount of which are uncertain. Management assesses the Company’s income tax positions and records tax benefits for all years subject to examination based upon an evaluation of the facts, circumstances, and information available at the reporting dates, which include historical operating results and expectations of future earnings. As such, management believes it is more likely

than not that the deferred tax assets recorded will be realized to reduce future income taxes and therefore no valuation allowances are necessary.

The table below provides a reconciliation between the tax expense computed by applying the statutory federal income tax rate to income before income taxes and the provision for income taxes:

	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Income tax expense computed at statutory rate	$	27,129	$	17,872	$	20,981
Increases (decreases) resulting from:
State income taxes, net of federal tax benefit	4,985		4,902		1,936
Federal jobs credits	(3,089)		(3,164)		(5,006)
Tax exempt interest	(323)		(399)		(384)
Share-based compensation	1,323		298		(1,179)
Other, net	479		1,006		38
Income tax expense	$	30,504	$	20,515	$	16,386

The Company performs an evaluation each period of its tax positions taken and expected to be taken in tax returns. The evaluation is performed on positions relating to tax years that remain subject to examination by major tax jurisdictions, the earliest of which is the tax year ended December 31, 2015. Based on the evaluation, the Company concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Therefore, the table reporting on the change in the liability for unrecognized tax benefits during the years ended December 31, 2020 and 2019 is omitted as there is no activity to report in such account for the years ended December 31, 2020 or 2019.