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INCOME TAXES | 12 Months Ended
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Mar. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | Income Taxes The Company’s provision for income taxes was $165,614, $96,457, and $51,854, for the years ended March 31, 2022, 2021, and 2020, respectively. This represents effective tax rates of 27.4%, 23.6%, and 22.0% for the years ended March 31, 2022, 2021, and 2020, respectively. The provision (benefit) for income taxes on operations for the years ended March 31, 2022, 2021, and 2020 is comprised of the following approximate values:
| Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 134,054 |  |  | $ | 71,832 |  |  | $ | 39,796 |
State and local | 58,568 |  |  | 27,230 |  |  | 10,217 |
Foreign | 44,060 |  |  | 18,632 |  |  | 11,495 |
Subtotal | 236,682 |  |  | 117,694 |  |  | 61,508 |
Deferred: |  |  |  |  |
Federal | (52,088) |  |  | (16,244) |  |  | (6,317) |
State and local | (18,348) |  |  | (4,543) |  |  | (2,104) |
Foreign | (632) |  |  | (450) |  |  | (1,233) |
Subtotal | (71,068) |  |  | (21,237) |  |  | (9,654) |
Total | $ | 165,614 |  |  | $ | 96,457 |  |  | $ | 51,854 |
The provision for income taxes on operations for the years ended March 31, 2022, 2021, and 2020 is reconciled to the income taxes computed at the statutory federal income tax rate (computed by applying the federal corporate rate of 21% to consolidated operating income before provision for income taxes) as follows:
| Year Ended March 31,
| 2022 |  | 2021 |  | 2020
Federal income tax provision computed at statutory rate | $ | 126,826 |  |  | 21.0 | % |  | $ | 85,937 |  |  | 21.0 | % |  | $ | 49,486 |  |  | 21.0 | %
State and local taxes, net of federal tax effect | 31,559 |  |  | 5.2 | % |  | 18,877 |  |  | 4.6 | % |  | 10,819 |  |  | 4.6 | %
Tax impact from foreign operations | 3,990 |  |  | 0.7 | % |  | (1,036) |  |  | (0.2) | % |  | (1,083) |  |  | (0.5) | %
Nondeductible expenses | 10,654 |  |  | 1.8 | % |  | 6,004 |  |  | 1.5 | % |  | 4,721 |  |  | 2.0 | %
Stock compensation | (7,421) |  |  | (1.2) | % |  | (13,349) |  |  | (3.3) | % |  | (7,269) |  |  | (3.1) | %
Uncertain tax positions, true-up items, and other | 6 |  |  | — | % |  | 24 |  |  | — | % |  | (4,820) |  |  | (2.0) | %
Total | $ | 165,614 |  |  | 27.4 | % |  | $ | 96,457 |  |  | 23.6 | % |  | $ | 51,854 |  |  | 22.0 | %
Deferred income taxes arise principally from temporary differences between book and tax recognition of income, expenses, and losses relating to financing and other transactions. The deferred income taxes on the accompanying consolidated balance sheets as of March 31, 2022 and March 31, 2021, comprise the following:
| March 31, 2022 |  | March 31, 2021
Deferred tax assets: |  |  |
Deferred compensation expense/accrued bonus | $ | 126,249 |  |  | $ | 75,140 |
Allowance for credit losses | 1,612 |  |  | 1,305 |
Accounts receivable and work in progress | 6,814 |  |  | 2,084 |
US foreign tax credits | 2,400 |  |  | 2,475 |
Operating lease liabilities | 25,947 |  |  | 31,499 |
Non US | 32,374 |  |  | 14,234 |
Other, net | 10,925 |  |  | 1,452 |
Total deferred tax assets | 206,321 |  |  | 128,189 |
Deferred tax asset valuation allowance | (9,234) |  |  | (9,783) |
Total deferred tax assets | 197,087 |  |  | 118,406 |
Deferred tax liabilities: |  |  |
Intangibles | (72,983) |  |  | (49,913) |
Operating lease right-of-use assets | (21,907) |  |  | (27,856) |
Other, net | (7,707) |  |  | (12,358) |
Total deferred tax liabilities | (102,597) |  |  | (90,127) |
Net deferred tax assets | $ | 94,490 |  |  | $ | 28,279 |
The Company has various state and foreign net operating losses totaling $74,690. If not utilized, the state net operating loss carryforwards will begin to expire in six years and foreign net operating loss carryforwards will begin to expire in ten years, although in certain jurisdictions these attributes do not expire. A valuation allowance is required when it is more likely than not that some portion of the deferred tax assets will not be realized. The Company has determined that deferred tax assets related to US foreign tax credits and certain foreign deferred tax assets are not likely to be realized. The Company’s credit carryforwards as of March 31, 2022 were primarily driven as a result of U.S. Tax Reform. The Company assessed the realizability of these foreign tax credits based on currently enacted and proposed legislation issued by the U.S. Department of Treasury and the Internal Revenue Service, and recorded a full valuation allowance of $2,400 and $2,475 against these assets for March 31, 2022 and 2021, respectively. The Company does not expect to utilize these foreign tax credits in the future as the Company does not currently project future foreign source income. These foreign tax credits will expire in various years through 2030. In addition, certain deferred tax assets related to tax deductible goodwill from previous acquisitions and net operating losses generated from these deductions were not more likely than not realizable; therefore, the Company maintained valuation allowances for March 31, 2022 and 2021 of $6,834 and $7,308, respectively. The change in the total valuation allowance was a decrease of $549 and a decrease of $1,314 during the years ended March 31, 2022 and March 31, 2021, respectively. The Company has historically considered the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of fiscal 2021. In the first quarter of fiscal 2022, we identified $97,000 of cash in certain foreign jurisdictions in excess of current working capital needs and repatriated the full amount. With the exception of this one-time distribution of historic earnings, the assertion that all undistributed earnings of foreign subsidiaries should be considered indefinitely reinvested remains. Deferred taxes recorded for the distribution were not significant. We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. Determination of the amount of unrecognized deferred tax liability on these unremitted earning is not practicable. As of March 31, 2022 and March 31, 2021, the Company had recorded liabilities for interest and penalties related to uncertain tax positions in the amounts of $1,228 and $1,984, net of any future tax benefit of such interest, respectively. Unrecognized tax positions totaled $18,654 and $14,666 as of March 31, 2022 and March 31, 2021, respectively. If the income tax impacts from these tax positions are ultimately realized, such realization would affect the income tax provision and effective tax rate. A reconciliation of the unrecognized tax position as of March 31, 2022 and March 31, 2021 is as follows:
| March 31, 2022 |  | March 31, 2021
Unrecognized tax position at the beginning of the year | $ | 14,666 |  |  | $ | 9,947 |
Increase related to prior year tax positions | 10,054 |  |  | 2,979 |
Decrease related to prior year tax positions | (6,395) |  |  | — |
Increase related to tax positions taken in the current year | 329 |  |  | 1,740 |
Unrecognized tax position at the end of the year | $ | 18,654 |  |  | $ | 14,666 |
The Company believes that it is reasonably possible that a decrease of up to $8.0 million in gross unrecognized income tax benefits for federal and state items may be necessary within the next 12 months. For the remaining uncertain income tax positions, it is difficult at this time to estimate the timing of the resolution. The Company files consolidated federal income tax returns, as well as consolidated and separate returns in state and local jurisdictions. As of March 31, 2022, all of the federal income tax returns filed since 2019 by the Company are still subject to adjustment upon audit. The Company also files combined and separate income tax returns in many states, which are also open to adjustment. The Company is currently under New York State audit for the years ended March 31, 2017, March 31, 2018, and March 31, 2019. The Company is currently under New York City audit for the years ended March 31, 2016, March 31, 2017, and March 31, 2018.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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