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Income Taxes | 12 Months Ended
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Dec. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Significant components of the provision for income taxes, including those related to non-controlling interest, are as follows:
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 11.6 |  |  | $ | 29.8 |  |  | $ | 14.1 |
State | 4.1 |  |  | 8.3 |  |  | 4.0 |
Foreign | 0.9 |  |  | 0.3 |  |  | 0.8 |
Current provision | 16.6 |  |  | 38.5 |  |  | 18.8 |
Deferred: |  |  |  |  |
Federal | (2.0) |  |  | (13.1) |  |  | (0.7) |
State | 1.1 |  |  | (2.8) |  |  | 0.4 |
Foreign | (0.1) |  |  | 0.0 |  |  | (0.1) |
Deferred provision | (1.0) |  |  | (15.9) |  |  | (0.4) |
Total income tax expense | $ | 15.6 |  |  | $ | 22.5 |  |  | $ | 18.5 |
The differences between the actual tax expense and tax expense computed at the statutory United States federal tax rate are explained as follows:
| 2023 |  | 2022 |  | 2021
Federal statutory tax expense | $ | 13.6 |  |  | $ | 30.7 |  |  | $ | 16.4 |
State taxes, net of federal tax effect | 3.7 |  |  | 5.6 |  |  | 3.7 |
Credit for research activities | (5.3) |  |  | (4.2) |  |  | (4.0) |
Valuation allowance | (0.9) |  |  | (7.1) |  |  | (0.2) |
Foreign taxes | 0.7 |  |  | 0.7 |  |  | 0.8 |
Executive compensation limitation | 1.7 |  |  | 1.4 |  |  | 1.2 |
Acquisition expenses | 1.8 |  |  | — |  |  | — |
Sale of foreign subsidiary | — |  |  | (4.2) |  |  | — |
Provision to return true-up | (0.8) |  |  | 0.1 |  |  | (0.8) |
Other – net | 1.1 |  |  | (0.5) |  |  | 1.4 |
Total income tax expense | $ | 15.6 |  |  | $ | 22.5 |  |  | $ | 18.5 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation’s deferred tax liabilities and assets are as follows:
| December 30, 2023 |  | December 31, 2022
Deferred Taxes |  |  |
Allowance for doubtful accounts | $ | 1.3 |  |  | $ | 0.7 |
Compensation | 13.5 |  |  | 7.2 |
Inventory differences | — |  |  | 1.2 |
Stock-based compensation | 8.5 |  |  | 7.9 |
Accrued post-retirement benefit obligations | 4.5 |  |  | 4.4 |
Vacation accrual | 2.1 |  |  | 3.9 |
Warranty accrual | 5.2 |  |  | 4.2 |
Tax loss and tax credit carryforwards | 9.1 |  |  | 5.8 |
Capital loss carryforward | 3.3 |  |  | 0.1 |
Lease liability | 35.0 |  |  | 27.3 |
Research and development capitalization | 30.9 |  |  | 16.3 |
Other | 3.8 |  |  | 2.6 |
Total deferred tax assets | $ | 117.2 |  |  | $ | 81.7 |
Deferred income | (5.7) |  |  | (5.6) |
Inventory differences | (3.8) |  |  | — |
Goodwill and other intangible assets | (64.7) |  |  | (48.1) |
Prepaid expenses | (7.7) |  |  | (6.6) |
Right of use asset | (31.4) |  |  | (24.7) |
Tax over book depreciation | (78.3) |  |  | (53.0) |
Total deferred tax liabilities | $ | (191.6) |  |  | $ | (137.9) |
Valuation allowance | (9.8) |  |  | (4.2) |
Total net deferred tax liabilities | $ | (84.2) |  |  | $ | (60.4) |
Long-term net deferred tax assets | 0.9 |  |  | 0.7 |
Long-term net deferred tax liabilities | (85.1) |  |  | (61.0) |
Total net deferred tax liabilities | $ | (84.2) |  |  | $ | (60.4) |
The valuation allowance, which primarily relates to acquired deferred tax assets, is as follows:
|  | Balance at beginning of period |  | Expenses (benefits) |  | Impact of business combination |  | Balance at end of period
Year ended December 30, 2023 |  | $ | 4.2 |  |  | $ | (0.9) |  |  | $ | 6.5 |  |  | $ | 9.8 |
Year ended December 31, 2022 |  | $ | 11.3 |  |  | $ | (7.1) |  |  | $ | — |  |  | $ | 4.2 |
Year ended January 1, 2022 |  | $ | 11.5 |  |  | $ | (0.2) |  |  | $ | — |  |  | $ | 11.3 |
The current year net increase in the valuation allowance of $5.6 million primarily relates to the acquisition of Kimball International state and foreign tax credits, partially offset by the release of existing allowances. The prior year decrease of $7.1 million primarily relates to the sale of Lamex in July 2022. This transaction created tax benefits for valuation adjustments related to existing deferred tax assets, as well as basis differences. As of December 30, 2023, the Corporation had $3.7 million of foreign net operating losses and $2.9 million of U.S. state tax credit carryforwards, which expire over the next twenty years. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2023 |  | 2022 |  |
Balance at beginning of period | $ | 2.2 |  |  | $ | 2.2 |  |  |
Increases in positions taken in a prior period | 0.8 |  |  | — |  |  |
New positions taken in a current period | 0.6 |  |  | 0.5 |  |  |
Decrease due to lapse of statute of limitations | (0.6) |  |  | (0.5) |  |  |
Balance at end of period | $ | 3.0 |  |  | $ | 2.2 |  |  |
As of December 30, 2023, it is reasonably possible the amount of unrecognized tax benefits may increase or decrease within the twelve months following the reporting date. These increases or decreases in the unrecognized tax benefits would be due to new positions that may be taken on income tax returns, settlement of tax positions, and the closing of statutes of limitation. It is not expected any of the changes will be material individually, or in total, to the results or financial position of the Corporation. The Corporation recognizes interest related to unrecognized tax benefits in interest expense, and penalties in operating expenses, consistent with the recognition of these items in prior reporting periods. The expenses and liabilities recorded for interest and penalties as of and for the years ended December 30, 2023 and December 31, 2022 are immaterial. Tax years 2020 through 2022 remain open for examination by the Internal Revenue Service ("IRS"). Tax years 2019 through 2022 remain open for examination in various state and foreign jurisdictions. The Corporation is not currently under federal or state income tax examination.

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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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