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Income Taxes
 6 Months Ended
Dec. 29, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

6. Income Taxes

The provision (benefit) for income taxes and effective tax rate were as follows:

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

December 29, 2024

 

 

December 31, 2023

 

 

December 29, 2024

 

 

December 31, 2023

 

Provision (benefit) for income taxes

 

$

1,345

 

 

$

380

 

 

$

3,522

 

 

$

(83

)

Effective tax rate

 

 

(13.4

)%

 

 

(2.0

)%

 

 

(22.7

)%

 

 

0.3

%

Income Tax Expense

UNIFI’s provision (benefit) for income taxes for the six months ended December 29, 2024 and December 31, 2023 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax book income and adjusting for discrete items that occurred during the period.

The effective tax rate for the three and six months ended December 29, 2024 and December 31, 2023 varied from the U.S. federal statutory rate primarily due to the U.S. generated losses for which UNIFI does not expect to realize a future tax benefit.

During the six months ended December 31, 2023, the Internal Revenue Service (the “IRS”) audit of fiscal years 2014 through 2019 was concluded with a net refund of $1,275, which has been received along with $457 of interest on overpayments. The impact from the audit adjustments to the prior periods was insignificant.

Unrecognized Tax Benefits

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination.

Following the conclusion of the IRS audit during the period ended December 31, 2023, UNIFI adjusted the uncertain tax positions for fiscal years 2014 through 2019 that were effectively settled. The impact from releasing the netted uncertain tax position liabilities was insignificant.

 

During the three months ended December 31, 2023, UNIFI released $853 accrued for interest and penalties after receiving the final assessment from the IRS.