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Income Taxes | 12 Months Ended
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Jun. 30, 2021
Income Taxes |
Income Taxes | Note 15: Income Taxes The Company’s effective income tax rate for the years ended June 30, 2021 and 2020 was (27.9%) and 28%, respectively, which differed from the amount computed by applying the applicable U.S. federal statutory corporate income tax rate of 21% in each period as a result of the following factors: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended June 30,
​ | ​ | 2021 |  | 2020
​ |  | in thousands
​ | ​ | ​ | ​ | ​ | ​ | ​
Statutory rate | ​ | $ | (7,343) | ​ | $ | 7,483
IRC Section 162(m) limitation (a) | ​ | ​ | 12,526 | ​ | ​ | —
Transaction costs (b) | ​ | ​ | 2,770 | ​ | ​ | —
Change in valuation allowance | ​ | ​ | 1,500 | ​ | ​ | (128)
Permanent adjustments | ​ | ​ | 306 | ​ | ​ | 268
Prior year true-up and other | ​ | ​ | (227) | ​ | ​ | 347
Income from entities not subject to taxation | ​ | ​ | 66 | ​ | ​ | 108
State tax | ​ | ​ | 173 | ​ | ​ | 1,790
Provision for income taxes | ​ | $ | 9,771 | ​ | $ | 9,868
| (a) | Reflects the permanent addback for the Section 162(m) limitation, which limits the deduction of compensation for the five highest paid officers to $1,000,000.
| (b) | Amount relates to transaction costs incurred as a result of the July 27, 2020 transaction between us, an affiliate of Apax Partners and our then existing equity holders entering into a Securities Purchase Agreement (the “Apax Transaction”).
​ Provision for income taxes consisted of the following for the years ended June 30, 2021 and 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended June 30,
​ |  | 2021 |  | 2020
​ | ​ | in thousands
Current: | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 2,710 | ​ | $ | 5,382
State | ​ | ​ | 642 | ​ | ​ | 1,313
Total current tax expense | ​ | ​ | 3,352 | ​ | ​ | 6,695
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred: | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ​ | 5,342 | ​ | ​ | 2,349
State | ​ | ​ | 1,077 | ​ | ​ | 824
Total deferred tax expense | ​ | ​ | 6,419 | ​ | ​ | 3,173
Total provision for income taxes | ​ | $ | 9,771 | ​ | $ | 9,868
​ The significant components of deferred tax assets and liabilities were as follows for the years ended June 30, 2021 and 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Year ended June 30,
​ |  | 2021 |  | 2020
​ | ​ | in thousands
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax assets: | ​ | ​ | ​ | ​ | ​ | ​
Amortization | ​ | $ | 2,241 | ​ | $ | 2,033
State net operating losses | ​ | ​ | 1,887 | ​ | ​ | 387
Transaction costs | ​ | ​ | 1,092 | ​ | ​ | 1,204
Provision for uncollectible accounts | ​ |  | 1,112 | ​ |  | 1,644
Accrued vacation | ​ |  | 979 | ​ |  | 984
Reported and estimated claims | ​ |  | 941 | ​ |  | 889
Stock-based compensation | ​ |  | 428 | ​ |  | 856
Accrued bonuses | ​ |  | 65 | ​ |  | 38
Total deferred tax assets | ​ | ​ | 8,745 | ​ | ​ | 8,035
Valuation allowance | ​ | ​ | (1,887) | ​ | ​ | (387)
Deferred tax assets, net of valuation allowance | ​ | ​ | 6,858 | ​ | ​ | 7,648
Deferred tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Goodwill | ​ | ​ | (9,934) | ​ | ​ | (8,057)
Depreciation | ​ | ​ | (7,394) | ​ | ​ | (8,053)
Equity investment | ​ | ​ | (3,222) | ​ | ​ | (6)
Prepaid expenses | ​ | ​ | (2,008) | ​ | ​ | (814)
Total deferred tax liabilities | ​ | ​ | (22,558) | ​ | ​ | (16,930)
Net deferred tax liability | ​ | $ | (15,700) | ​ | $ | (9,282)
​ Carryforwards The Company had state net operating loss carryforwards of $30.9 million and $15.0 million at June 30, 2021 and 2020, respectively, which will begin to expire in 2037 if not utilized. Additionally, the Company has no federal net operating loss carryforwards as of June 30, 2021 and 2020. Valuation Allowance The Company has provided $1.9 million and $0.4 million at June 30, 2021 and June 30, 2020, respectively, as a valuation allowance against its deferred tax assets for state net operating losses where there is not sufficient positive evidence to substantiate that these deferred tax assets will be realized at a more-likely-than-not level of assurance. Other The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitation and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine the impacts that the CARES Act may have on its business. As a result of the CARES Act, it is anticipated that the Company will fully utilize all interest expense with no additional disallowed interest expense through June 30, 2021. While several other CARES Act provisions may impact the Company, there have not been any significant impacts noted through June 30, 2021. The Company had no uncertain tax positions at June 30, 2021 and 2020. The Company files income tax returns as a consolidated group, excluding SH1 and InnovAge Sacramento, in the U.S. federal jurisdiction and various states and is subject to examination by taxing authorities in all of those jurisdictions. From time to time, the Company’s tax returns are reviewed or audited by U.S. federal and various U.S. state-taxing authorities. The Company believes that adjustments, if any, resulting from these reviews or audits would not be material, individually or in the aggregate, to the Company’s consolidated financial position, results of operations, or liquidity. The Company is subject to income tax examinations by U.S. federal and state jurisdictions for the period ended June 30, 2018 and forward. The Company is subject to income tax examinations by California, Colorado and New Mexico state jurisdictions for the period ended June 30, 2017 and forward.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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