CHEMED CORP Income Taxes Disclosure

The provision for income taxes comprises the following (in thousands):

A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands):

At December 31, 2025 and 2024, state net operating loss carryforwards were $52.0 million and $39.4 million, respectively. These net operating losses will expire, in varying amounts, between 2026 and 2045. Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets.

A reconciliation of the beginning and ending of year amount of our unrecognized tax benefit is as follows (in thousands):

We file tax returns in the U.S. federal jurisdiction and various states. The years ended December 31, 2022 and forward remain open for review for federal income tax purposes. The earliest open year relating to any of our major state jurisdictions is the fiscal year ended December 31, 2021.

We classify interest related to our accrual for uncertain tax positions in separate interest accounts. As of December 31, 2025, and 2024, we have approximately $180,000 and $275,000, respectively, accrued in interest payable related to uncertain tax positions. These accruals are included in other current liabilities in the accompanying consolidated balance sheet. Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material.

The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands):

(1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Florida and Illinois for 2025 and 2024, and 2023.

During the third quarter of 2023, the Company recognized a tax benefit from realignment of its state and local corporate tax structure based on the location of operating resources and profitability by business segment. This benefit includes a reduction in current state and local tax expense and a one-time benefit of $4.2 million in reduction of deferred tax liabilities reflecting the lower tax rates.

Summarized below are the total amounts of income taxes paid (net of refunds received) during the years ended December 31 (in thousands):

(1) In 2025, 2024, and 2023, there were no individual jurisdictions with cash taxes paid (net of refunds received) that equaled or exceeded 5% of total income taxes paid.