Century Communities, Inc. Income Taxes Disclosure

13. Income Taxes Our income tax expense for the years ended December 31, 2025, 2024 and 2023 comprises the following current and deferred amounts (in thousands): Year Ended December 31, 2025 2024 2023Current U.S. Federal $ 52,531 $ 92,177 $ 73,003State and local 10,240 19,289 14,745Total current 62,771 111,466 87,748Deferred U. S. Federal (13,136) (4,467) 3,020State and local (2,820) (755) 838Total deferred (15,956) (5,222) 3,858Income tax expense $ 46,815 $ 106,244 $ 91,606 The following presents a reconciliation of the income tax provision based on the U.S. federal statutory tax rate to the total effective tax rate (in thousands): Year Ended December 31, 2025 2024 2023U.S. Federal statutory tax rate $ 40,827 21.0% $ 92,413 21.0% $ 73,652 21.0%State and local income taxes, net of federal income tax effect (1) 7,293 3.8% 15,439 3.5% 12,966 3.7%Tax Credits Energy-related tax credits (2,737) (1.4)% (6,584) (1.5)% (2,596) (0.7)%Other tax credits — —% (5) (0.0)% (187) (0.1)%Nontaxable or Nondeductible Items Executive compensation 3,136 1.6% 6,470 1.5% 9,507 2.7%Other 154 0.1% (535) (0.1)% (150) (0.0)%Other adjustments (1,858) (1.0)% (954) (0.2)% (1,586) (0.5)%Income tax expense $ 46,815 24.1% $ 106,244 24.1% $ 91,606 26.1%(1)State taxes in California, Colorado, and Georgia made up the majority (greater than 50%) of the tax effect in this category.  Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences. Temporary differences arise when revenues and expenses for financial reporting are recognized for tax purposes in a different period. ASC 740 requires that a valuation allowance be recorded against deferred tax assets unless it is more likely than not that the deferred tax assets will be utilized. As a result of this analysis, the Company has not recorded a valuation allowance against its deferred tax assets. The Company will continue to evaluate the need to record valuation allowances against deferred tax assets and will make adjustments in accordance with the accounting standard. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024Deferred tax assets Warranty reserves $ 3,417 $ 3,196Stock-based compensation 1,993 1,938Accrued compensation and other 14,036 13,628Inventories, additional costs capitalized for tax 26,043 18,887Lease liabilities 2,951 3,675Amortizable intangible assets 3,017 4,103Other 12,371 9,813Deferred tax assets 63,828 55,240 Deferred tax liabilities Prepaid expenses (1,154) (305)Property and equipment (14,768) (12,325)Mortgage servicing rights (2,755) (10,233)Right of use assets (2,651) (3,355)Other (4,324) (6,802)Deferred tax liabilities (25,652) (33,020)Net deferred tax assets $ 38,176 $ 22,220 Net cash paid for income taxes consisted of the following (in thousands): Year Ended December 31, 2025 2024 2023U.S. Federal $ 44,500 $ 87,199 $ 58,500State 9,177 15,185 21,880Net cash paid for income taxes $ 53,677 $ 102,384 $ 80,380 No jurisdictions exceeded 5 percent of net cash paid for income taxes during the years ended December 31, 2025 and 2024, respectively. Net cash paid for income taxes for the state of California were $11.8 million and exceeded 5 percent of total income taxes paid (net of refunds) during the year ended December 31, 2023. The uncertainty provisions of ASC 740 also require the Company to recognize the impact of a tax position in its consolidated financial statements only if the technical merits of that position indicate that the position is more likely than not of being sustained upon audit. During the years ended December 31, 2025 and 2024, the Company did not record a reserve for uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are subject to U.S. federal income tax examinations and various state income tax examinations for calendar tax years for which the applicable statute of limitations remains open, ranging from calendar tax years ending 2020 through 2025. As of December 31, 2025, we are not currently under an income tax audit by any federal, state, or local authorities.