Note 11 - Income Taxes

6 Months Ended

Jun. 26, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(11)Income Taxes

A valuation allowance against deferred tax assets is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized. In December 2018, the Company established a valuation allowance reserve, as it is judged more likely than not that all or a portion of its deferred tax assets will not be utilized before they expire. This decision was reached after giving greater weight to the Company’s losses in recent years as compared to its forecasts.

The Coronavirus Aid, Relief and Economic Security Act (“Act”) became law on March 27, 2020. The Act contains two provisions that provide a tax benefit to the Company. The Act suspends the current 80% limitation on the utilization of net operating losses for taxable years beginning in 2018, 2019 and 2020. The Act also allows net operating losses arising in 2018, 2019 and 2020 to be carried back five years. The Act also accelerates the ability of the Company to recover Federal alternative minimum tax credits.

The Company recorded a reduction of the valuation allowance reserve of $8 thousand and $69, respectively during the three and six months ended June 26, 2021 to account for the utilization of deferred tax assets to reduce the current tax liability for the three and six months ended June 26, 2021. As a result of the utilization of deferred tax assets, the Company did not record a provision for income taxes for the three months ended June 26, 2021, and less than $1 thousand for the six months so ended.