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Note 12 - Income Tax
 12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 12 – Income Tax

 

The provision for income taxes is comprised of the following (in thousands):

 

  

December 31,

 

December 31,

  

2022

 

2021

Current

        

Federal

 $1,874  $2,030 

State

  434   972 

Deferred

        

Federal

  (279)  (2,045)

State

  (134)  (322)

Provision for income taxes

 $1,895  $635 

 

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 our deferred taxes are as follows (in thousands):

 

  

December 31,

 

December 31,

  

2022

 

2021

Deferred tax assets

        

Workers' compensation claims liability

 $1,227  $1,517 

Bad debt reserve

  17   6 

Accrued vacation

  73   44 

Impairment of notes receivable

  63   464 

Stock based compensation

  268   145 

Accrued compensation

  -   262 

Net operating loss carryforward

  123   228 

Other

  87   - 

Total deferred tax asset

  1,858   2,666 

Deferred tax liabilities

        

Depreciation/amortization

  (1,918)  (2,208)

Cash to Accrual - 481 Adjustment

  -   (931)

Total deferred tax liabilities

  (1,918)  (3,139)

Total deferred taxes, net

 $(60) $(473)

 

At December 31, 2022, the Company has a federal net operating loss carry-forward of approximately $585 thousand available to offset future federal taxable income. The federal net operating loss may be carried forward indefinitely, however, utilization of future net operating losses may be limited due to ownership changes under applicable sections of the Internal Revenue Code.

 

Management estimates that our effective tax rates was approximately 13.7% for 2022. The items accounting for the difference between income taxes computed at the statutory federal income tax rate and the income taxes reported on the statements of income are as follows (in thousands except percentages):

 

  

December 31, 2022

 

December 31, 2021

Income tax expense based on statutory rate

 $2,913   21.0% $2,620   21.0%

Bargain purchase gain

  -   0.0%  (1,181)  (9.5)%

Non-deductible executive compensation

  120   0.9%  204   1.6%

Stock based compensation

  (75)  -0.5%  (154)  (1.2)%

State income taxes expense net of federal taxes

  210   1.5%  444   3.6%

WOTC

  (1,269)  -9.1%  (1,204)  (9.7)%

Other

  (4)  0.0%  (94)  (0.8)%

Total taxes on income

 $1,895   13.7% $635   5.1%

 

U.S. federal income tax returns after 2019 remain open to examination. Generally, state income tax returns after 2017 remain open to examination. No income tax returns are currently under examination. As of December 31, 2022, and December 31, 2021, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes.