Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 11 — Income Taxes

The following table summarizes the provision for income taxes:

	Year Ended December 31,
	2024		2023		2022
	(amounts in thousands)
Current:
Federal	$	12,275	$	13,728	$	3,022
State	4,139		5,762		2,381
	$	16,414	$	19,490	$	5,403
Deferred:
Federal	$	(2,304)	$	(4,183)	$	4,163
State	(640)		(637)		744
	$	(2,944)	$	(4,820)	$	4,907
Tax provision	$	13,470	$	14,670	$	10,310

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,
	2024		2023
	(in thousands)
Deferred tax assets:
Allowance for doubtful accounts	$	25,138	$	22,788
Deferred compensation	9,159		9,048
Accrued insurance claims	5,277		5,580
Non-deductible reserves	497		169
Lease liabilities	4,214		4,765
Share based compensation	3,312		2,988
Other	3,275		2,418
	$	50,872	$	47,756
Deferred tax liabilities:
Expensing of housekeeping supplies	$	(2,174)	$	(2,351)
Amortization of goodwill and intangibles	(3,861)		(3,000)
Depreciation of property and equipment	(1,664)		(1,688)
Lease right-of-use assets	(4,048)		(4,571)
Other	(955)		(920)
	$	(12,702)	$	(12,530)
Net deferred tax assets	$	38,170	$	35,226

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,
	2024		2023		2022
	(in thousands)
Income tax expense computed at statutory rate	$	11,118	$	11,182	$	9,356
Increases (decreases) resulting from:
State income taxes, net of federal tax benefit	2,631		4,153		2,594
Federal jobs credits	(1,914)		(2,014)		(2,571)
Tax exempt interest	(306)		(348)		(308)
Share-based compensation	1,722		1,610		1,250
Fines and penalties	18		55		4
Other, net	201		32		(15)
Income tax expense	$	13,470	$	14,670	$	10,310

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, 2019. 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, 2024 and 2023 is omitted as there is no activity to report in such account for the years ended December 31, 2024 or 2023.