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INCOME TAXES | 12 Months Ended
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Jun. 26, 2022
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE F - INCOME TAXES: Benefit from income taxes from continuing operations consists of the following (in thousands):
|  | Fiscal Year Ended |
|  | June 26, 2022 |  |  | June 27, 2021 |
Current - Federal |  | $ | — |  |  | $ | — |
Current - State |  |  | (115 | ) |  |  | 29 |
Deferred - Federal |  |  | 5,537 |  |  |  | — |
Deferred - State |  |  | 235 |  |  |  | — |
Benefit from income taxes |  | $ | 5,657 |  |  | $ | 29 |
The effective income tax rate varied from the statutory rate for the fiscal years ended June 26, 2022 and June 27, 2021 as reflected below (in thousands):
|  | June 26, 2022 |  |  | June 27, 2021 |
Federal income taxes based on a statutory rate of 21% |  | $ | (496 | ) |  | $ | (313 | )
State income taxes (net of federal benefit) |  |  | 127 |  |  |  | 23 |
Permanent adjustments |  |  | — |  |  |  | (5 | )
PPP loan forgiveness |  |  | — |  |  |  | 138 |
Change in valuation allowance |  |  | 6,052 |  |  |  | 190 |
Other |  |  | (26 | ) |  |  | (4 | )
Income tax benefit |  | $ | 5,657 |  |  | $ | 29 |
The tax effects of temporary differences that give rise to the net deferred tax assets consisted of the following (in thousands):
|  | June 26, 2022 |  |  | June 27, 2021 |
Allowance for bad debt |  | $ | 6 |  |  | $ | 10 |
Deferred fees |  |  | 45 |  |  |  | 34 |
Other reserves and accruals |  |  | 652 |  |  |  | 542 |
Operating lease liabilities |  |  | 444 |  |  |  | 525 |
Depreciable assets |  |  | — |  |  |  | — |
Credit carryforwards |  |  | 156 |  |  |  | 197 |
Net operating loss carryforwards |  |  | 4,987 |  |  |  | 5,563 |
Total gross deferred tax asset |  |  | 6,290 |  |  |  | 6,871 |
Valuation allowance |  |  | — |  |  |  | (6,307 | )
Total deferred tax assets |  | $ | 6,290 |  |  | $ | 564 |
Right-of-use asset |  |  | (387 | ) |  |  | (461 | )
Other deferred tax liabilities |  |  | (131 | ) |  |  | (103 | )
Total deferred tax liabilities |  | $ | (518 | ) |  | $ | (564 | )
Net deferred tax asset |  | $ | 5,772 |  |  | $ | — |
For the year ended June 26, 2022, the Company recorded an income tax benefit of $5.7 million including federal deferred tax benefit of $5.5 million and current/deferred state tax benefit of $0.2 million. As of June 26, 2022, the Company had net operating loss carryforwards totaling $23.1 million that are available to reduce future taxable income and will begin to expire in 2032, of which $1.8 million are limited to 80% and do not expire. Tax returns for fiscal 2013 and after will remain open to examination by federal and state tax authorities for three to four years following the tax year in which net operating losses or tax credits are utilized. The Company was not subject to income tax examinations by any tax authority as of June 26, 2022. The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance. Based on this analysis, the Company reversed the full amount of the established valuation allowance as of June 26, 2022. The reversal of the valuation allowance resulting in tax benefit of $5.7 million in fiscal 2022. There are no material uncertain tax positions. Management’s position is that all relevant requirements are met and necessary returns have been filed, and therefore the tax positions taken on the tax returns would be sustained upon examination.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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