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Income Taxes | 12 Months Ended
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Jun. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s effective income tax rate for the years ended June 30, 2023 and 2022 was 14.3% and (10.0%), 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,
| 2023 |  | 2022
| in thousands
Statutory rate | $ | (10,667) |  |  | $ | (1,520) |
IRC Section 162(m) limitation (a) | 588 |  |  | 506 |
Change in valuation allowance | 4,297 |  |  | 2,738 |
Permanent adjustments | 457 |  |  | 662 |
Prior year true-up and other | 157 |  |  | 389 |
Income from entities not subject to taxation | 605 |  |  | 302 |
State tax | (2,678) |  |  | (2,354) |
Provision for income taxes | $ | (7,241) |  |  | $ | 723 |
___________________________________ (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. Provision for income taxes consisted of the following for the years ended June 30, 2023 and 2022:
| Year ended June 30,
| 2023 |  | 2022
| in thousands
Current: |  |  |
Federal | $ | 3,709 |  |  | $ | (998) |
State | 575 |  |  | (339) |
Total current tax expense | 4,284 |  |  | (1,337) |
Deferred: |  |  |
Federal | (10,263) |  |  | 1,408 |
State | (1,262) |  |  | 652 |
Total deferred tax expense | (11,525) |  |  | 2,060 |
Total provision for income taxes | $ | (7,241) |  |  | $ | 723 |
The significant components of deferred tax assets and liabilities were as follows for the years ended June 30, 2023 and 2022:
| Year ended June 30,
| 2023 |  | 2022
| in thousands
Deferred tax assets: |  |  |
Amortization | $ | 629 |  |  | $ | 686 |
Federal net operating losses | 17,147 |  |  | 3,083 |
State net operating losses | 5,701 |  |  | 4,048 |
Provision for uncollectible accounts | 1,114 |  |  | 869 |
Accrued vacation | 835 |  |  | 828 |
Reported and estimated claims | 1,164 |  |  | 1,025 |
Stock-based compensation | 449 |  |  | 185 |
Accrued bonuses | 582 |  |  | 102 |
Interest Expense | 791 |  |  | 496 |
Lease liability | 6,784 |  |  | — |
Other | — |  |  | 6 |
Total deferred tax assets | 35,196 |  |  | 11,328 |
Valuation allowance | (8,347) |  |  | (4,050) |
Deferred tax assets, net of valuation allowance | 26,849 |  |  | 7,278 |
Deferred tax liabilities: |  |  |
Goodwill | (6,697) |  |  | (9,108) |
Depreciation | (13,137) |  |  | (8,430) |
Equity investment | (5,019) |  |  | (5,429) |
Prepaid expenses | (1,792) |  |  | (2,072) |
ROU asset | (6,436) |  |  | — |
Other | (4) |  |  | — |
Total deferred tax liabilities | (33,085) |  |  | (25,039) |
Net deferred tax liability | $ | (6,236) |  |  | $ | (17,761) |
Carryforwards The Company had state net operating loss carryforwards of $117.9 million and $73.1 million at June 30, 2023 and 2022, respectively, which will begin to expire in 2037 if not utilized. Included in this is a city net operating loss which will begin to expire in 2025 if not utilized. Additionally, the Company has federal net operating loss carryforwards of $81.7 million and $14.7 million as of June 30, 2023 and 2022, respectively which do not expire. Valuation Allowance The Company has provided $8.3 million and $4.1 million at June 30, 2023 and June 30, 2022, respectively, as a valuation allowance against its deferred tax assets for federal and state net operating losses and state 163(j) interest expense limitations 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 Company had no uncertain tax positions at June 30, 2023 and 2022. 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, 2020 and forward. The Company is subject to income tax examinations by California, Colorado and New Mexico state jurisdictions for the period ended June 30, 2019 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 -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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