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Income Taxes | 12 Months Ended
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Dec. 26, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 10. Income Taxes The components of the net deferred tax liability are as follows:
| December 26, 2024 |  | December 28, 2023
Deferred tax assets |  |  |
Accrued employee benefits | $ | 13,171 |  |  | $ | 13,653 |
Operating lease liabilities | 47,121 |  |  | 50,601 |
Gift card liabilities | 6,030 |  |  | 6,490 |
Net operating loss, disallowed interest & tax credit carryforwards | 18,784 |  |  | 21,069 |
Other | 130 |  |  | 2,378 |
Total | 85,236 |  |  | 94,191 |
Less valuation allowance | (3,583) |  |  | (11,338) |
Deferred tax assets | 81,653 |  |  | 82,853 |
Deferred tax liabilities |  |  |
Depreciation and amortization | (68,767) |  |  | (68,164) |
Operating lease assets | (41,549) |  |  | (46,924) |
Deferred tax liabilities | (110,316) |  |  | (115,088) |
Net deferred tax liability | $ | (28,663) |  |  | $ | (32,235) |
Amounts recognized in the consolidated balance sheets consist of: |  |  |
Deferred income taxes - other assets | $ | 3,956 |  |  | $ | — |
Deferred income taxes - liabilities | (32,619) |  |  | (32,235) |
Net amount recognized | $ | (28,663) |  |  | $ | (32,235) |
As of December 26, 2024 and December 28, 2023, the Company had federal tax credit carryforwards of $3,010 and $4,150, respectively. As of December 26, 2024 and December 28, 2023, the Company has state net operating loss carryforwards of $200,279 and $209,866, respectively, which will expire primarily in the next 12 to 20 years. As of December 28, 2023, the valuation allowance for a portion of the Company’s state net operating loss carryforwards that are not more likely than not to be realized was $11,338. In fiscal 2024, the Company decreased the valuation allowance by $7,755 to $3,583. The amount of the state net operating loss carryforwards considered realizable could be adjusted if, among other factors, estimates of future taxable income during the carryforward periods are reduced or increased. Income tax expense (benefit) consists of the following:
| Year Ended
| December 26, 2024 |  | December 28, 2023 |  | December 29, 2022
Current: |  |  |  |  |
Federal | $ | 846 |  |  | $ | 603 |  |  | $ | (452) |
State | 713 |  |  | 692 |  |  | 556 |
Deferred: |  |  |  |  |
Federal | 2,833 |  |  | 3,900 |  |  | (3,222) |
State | (6,814) |  |  | 1,661 |  |  | 10,255 |
| $ | (2,422) |  |  | $ | 6,856 |  |  | $ | 7,137 |
The Company’s effective income tax rate, adjusted for earnings from noncontrolling interests, was 23.7%, 31.7% and (147.6)% for fiscal 2024, fiscal 2023 and fiscal 2022, respectively. A reconciliation of the statutory federal tax rate to the effective tax rate on earnings attributable to The Marcus Corporation follows:
| Year Ended
| December 26, 2024 |  | December 28, 2023 |  | December 29, 2022
Statutory federal tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit | (7.4) |  |  | 11.4 |  |  | 4.3 |
Tax credits, net of federal income tax benefit | 12.7 |  |  | (5.6) |  |  | 22.9 |
Valuation allowance | 76.0 |  |  | (4.8) |  |  | (205.9) |
Federal income tax benefit on state valuation allowance | (16.0) |  |  | 1.0 |  |  | 53.7 |
Excess tax benefits on share-based compensation | (3.3) |  |  | 2.8 |  |  | (22.1) |
Other compensation and benefits | (17.5) |  |  | 5.4 |  |  | (15.6) |
Meals and entertainment | (2.6) |  |  | 1.1 |  |  | (4.1) |
Debt conversion | (38.1) |  |  | — |  |  | — |
Other | (1.1) |  |  | (0.6) |  |  | (1.8) |
| 23.7 | % |  | 31.7 | % |  | (147.6) | %
The Company's effective income tax rate during fiscal 2024 was positively impacted by a $7,755 decrease in the valuation allowance for state net operating loss carryforwards, partially offset by a corresponding decrease in the federal benefit on the valuation allowance of $1,629, and was negatively impacted by a nondeductible debt conversion expense resulting from the Convertible Notes Repurchases and related termination of the Capped Call Transactions. The Company's effective income tax rate during fiscal 2022 was negatively impacted by a $9,956 increase in the valuation allowance for state net operating loss carryforwards, partially offset by a corresponding increase in the federal benefit on the valuation allowance of $2,598. Excluding the negative impact of the valuation allowance adjustment (net of federal benefit), the Company’s effective income tax rate during fiscal 2022 was 4.6%. The Company has not included the income tax expense related to the net earnings attributable to noncontrolling interests in its income tax expense as the entity is considered a pass-through entity and, as such, the income tax expense is attributable to its owners. Net income taxes paid in fiscal 2024 and 2023 were $1,428 and $1,776, respectively. Net income taxes refunded in fiscal 2022 were $21,935. Net income taxes refunded in fiscal 2022 included $22,300 related to federal net operating loss carrybacks to prior years, as allowed under the provisions of the CARES Act. The Company had no unrecognized tax benefits as of December 26, 2024, December 28, 2023 and December 29, 2022. The Company had no accrued interest or penalties at December 26, 2024 or December 28, 2023. The Company classifies interest and penalties relating to income taxes as income tax expense. For the year ended December 26, 2024, no interest income or expense was recognized in the consolidated statement of operations, compared to $1 of interest expense for the year ended December 28, 2023 and $683 of interest income for the year ended December 29, 2022. The Company's federal income tax returns for fiscal 2020 and prior are no longer subject to examination. With certain exceptions, the Company's state income tax returns are no longer subject to examination prior to fiscal 2019. At this time, the Company does not expect the results from any income tax audit or appeal to have a significant impact on the Company's financial statements.

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