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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES For financial reporting purposes, income before income taxes includes the following components (in thousands):
| 2023 |  | 2022 |  | 2021
United States | $ | 165,869 |  |  | $ | 141,288 |  |  | $ | 92,823 |
Foreign (Canada) | 434 |  |  | 187 |  |  | 193 |
Total | $ | 166,303 |  |  | $ | 141,475 |  |  | $ | 93,016 |
Income tax expense included in the accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 29,835 |  |  | $ | 20,910 |  |  | $ | 12,369 |
Foreign | 116 |  |  | 50 |  |  | 52 |
State and local | 10,298 |  |  | 7,299 |  |  | 3,397 |
Total | 40,249 |  |  | 28,259 |  |  | 15,818 |
Deferred: |  |  |  |  |
Federal | 3,978 |  |  | 5,667 |  |  | 5,029 |
State and local | 1,108 |  |  | 2,195 |  |  | 1,282 |
Total | 5,086 |  |  | 7,862 |  |  | 6,311 |
Total income tax expense | 45,335 |  |  | 36,121 |  |  | 22,129 |
The provision for income taxes attributable to income operations differed from the amount obtained by applying the federal statutory income tax rate to income before income taxes, as follows (in thousands, except percentages):
| 2023 |  | 2022 |  | 2021
Tax at U.S. federal statutory rates | $ | 34,924 |  |  | $ | 29,714 |  |  | $ | 19,538 |
State taxes (net of federal benefit) | 10,576 |  |  | 9,019 |  |  | 4,498 |
Reserves for uncertain tax positions | (241) |  |  | 337 |  |  | (104) |
Share-based compensation | (5,820) |  |  | (6,832) |  |  | (4,187) |
Non-deductible officers' compensation | 5,485 |  |  | 2,507 |  |  | 1,267 |
Other, net | 411 |  |  | 1,376 |  |  | 1,117 |
Provision for income taxes | $ | 45,335 |  |  | $ | 36,121 |  |  | $ | 22,129 |
Effective income tax rate | 27.3 | % |  | 25.5 | % |  | 23.8 | %
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, were as follows (in thousands):
| 2023 |  | 2022
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 1,515 |  |  | $ | 1,473 |
Allowance for doubtful accounts | 4,876 |  |  | 4,682 |
Employee benefits and compensation | 38,137 |  |  | 37,075 |
Lease costs | 7,398 |  |  | 6,871 |
Other deferred tax assets | 1,888 |  |  | 574 |
Total gross deferred tax assets | 53,814 |  |  | 50,675 |
Less: valuation allowance | (2,721) |  |  | (3,156) |
Total deferred tax assets, net | 51,093 |  |  | 47,519 |
Deferred tax liabilities: |  |  |
Goodwill and other intangibles | 77,005 |  |  | 68,306 |
Property and equipment | 836 |  |  | 1,185 |
Other deferred tax liabilities | 2,539 |  |  | 2,791 |
Total gross deferred tax liabilities | 80,380 |  |  | 72,282 |
Deferred income taxes, net | $ | (29,287) |  |  | $ | (24,763) |
We have established valuation allowances for deferred tax assets related to certain employee benefits and compensation and state net operating loss (“NOL”) carryforwards at December 31, 2023 and December 31, 2022. The net decrease in the valuation allowance of $0.4 million for the year ended December 31, 2023 related to changes in the valuation allowance for NOLs and certain employee benefits and compensation. In assessing the realization of deferred tax assets, management considers all available positive and negative evidence, including projected future taxable income, scheduled reversal of deferred tax liabilities, historical financial operations and tax planning strategies. Based upon review of these items, management believes it is more-likely-than-not that the Company will realize the benefits of these deferred tax assets, net of the existing valuation allowances. We file income tax returns in the United States, Canada, and most state jurisdictions. CBIZ's federal income tax returns for years ending prior to January 1, 2020 are no longer subject to examination. With limited exceptions, our state and local income tax returns and non-U.S. income tax returns are no longer subject to tax authority examinations for years ending prior to January 1, 2019 and January 1, 2018, respectively. The availability of NOLs and state tax credits are reported as a component of deferred tax assets, net of applicable valuation allowances, in the accompanying Consolidated Balance Sheets. At December 31, 2023, we had state net operating loss carryforwards of $50.8 million and a state tax credit carryforward of $0.1 million. The state net operating loss carryforwards expire on various dates between 2025 and 2044 and the state tax credit carryforward expires in 2028. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| 2023 |  | 2022 |  | 2021
Balance at January 1 | $ | 2,111 |  |  | $ | 1,594 |  |  | $ | 1,536 |
Additions for tax positions of the current year | 178 |  |  | 175 |  |  | 161 |
Additions for positions of prior years | 103 |  |  | 486 |  |  | 400 |
Settlements of prior year positions | — |  |  | — |  |  | (374) |
Lapse of statutes of limitation | (545) |  |  | (144) |  |  | (129) |
Balance at December 31 | $ | 1,847 |  |  | $ | 2,111 |  |  | $ | 1,594 |
Included in the balance of unrecognized tax benefits at December 31, 2023 are $1.1 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. We believe it is reasonably possible that certain of these unrecognized tax benefits could change in the next twelve months. We expect reductions in the liability for unrecognized tax benefits of approximately $0.2 million within the next twelve months due to expiration of statutes of limitation. Given the number of years that are currently subject to examination, we are unable to estimate the range of potential adjustments to the remaining balance of unrecognized tax benefits at this time. We recognize interest expense and penalties related to unrecognized tax benefits as a component of income tax expense. During 2023, we recorded an immaterial increase in accrued interest, and, as of December 31, 2023, we had recognized a liability for interest expense and penalties of $0.3 million and $0.2 million, respectively, relating to unrecognized tax benefits. During 2022, we recorded an immaterial increase in accrued interest, and, as of December 31, 2022, we had recognized a liability for interest expense and penalties of $0.3 million and $0.2 million, respectively, relating to unrecognized tax benefits.

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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