Concentra Group Holdings Parent, Inc.CON
Concentra Group Holdings Parent, Inc. Income Taxes Disclosure
Income Taxes
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The Company files separate, de-consolidated US federal income tax returns beginning on the spin-off date. For tax years ended November 25, 2024 and December 31, 2023, the Company joined Select in the filing of various consolidated federal, state, and local income tax returns, and is party to an income tax allocation agreement (the “Tax Sharing Agreement”). Under the Tax Sharing Agreement, the Company pays to or receives from Select the amount, if any, by which Select’s income tax liability is affected by virtue of inclusion of the Company in the consolidated tax returns of Select. Adjustments were made for the periods presented in the consolidated financial statements, to reflect the separate return method as if the Company filed income tax returns on a standalone basis.
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, or “ASC 740” and has applied ASU 2023-09 on a prospective basis.
The following table outlines the components of the Company’s income tax expense from continuing operations for the periods presented:
| For the Year Ended December 31, | |||||
| 2025 | |||||
| (in thousands) | |||||
Current income tax expense: | |||||
Federal | $ | 34,270 | |||
State and local | 8,752 | ||||
Total current income tax expense | 43,022 | ||||
Deferred income tax expense (benefit) | |||||
Federal | 10,340 | ||||
State and local | (2,384) | ||||
Total deferred income tax expense | 7,956 | ||||
Total income tax expense | $ | 50,978 | |||
| For the Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Current income tax expense: | |||||||||||
| Federal | $ | 49,676 | $ | 50,911 | |||||||
| State and local | 14,135 | 13,262 | |||||||||
| Total current income tax expense | 63,811 | 64,173 | |||||||||
Deferred income tax benefit | (4,315) | (6,286) | |||||||||
| Total income tax expense | $ | 59,496 | $ | 57,887 | |||||||
Reconciliations of the federal statutory income tax rate to the effective income tax rate are as follows:
| For the Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| Amount | Rate | ||||||||||
| Federal income tax at statutory rate | $ | 47,004 | 21.0 | % | |||||||
State and local income taxes, less federal income tax benefit(1) | 4,533 | 2.0 | |||||||||
Tax credits | (1,854) | (0.8) | |||||||||
Nontaxable or nondeductible items | |||||||||||
Limitation on officer’s compensation | 1,822 | 0.8 | |||||||||
Stock based compensation | 169 | 0.1 | |||||||||
Other permanent differences | 702 | 0.3 | |||||||||
Non-controlling interest | (1,351) | (0.6) | |||||||||
Other | (47) | (0.0) | |||||||||
| Effective income tax rate | $ | 50,978 | 22.8 | % | |||||||
(1) State taxes in California and New Jersey made up the majority (greater than 50%) of the tax effect in this category.
For the Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
Federal income tax at statutory rate | 21.0 | % | 21.0 | % | |||||||
State and local income taxes, less federal income tax benefit | 4.6 | 4.2 | |||||||||
Permanent differences | 0.7 | 0.3 | |||||||||
Deferred income taxes — state income tax rate adjustment | 0.0 | (0.3) | |||||||||
Revision to prior years’ estimated taxes | 0.3 | 0.4 | |||||||||
Stock-based compensation | (0.0) | (0.5) | |||||||||
Non-controlling interest | (0.6) | (0.5) | |||||||||
Other | (0.3) | (0.7) | |||||||||
Effective income tax rate | 25.7 | % | 23.9 | % | |||||||
The following table outlines the income taxes paid by the Company:
For the Year Ended December 31, | |||||
| 2025 | |||||
| (in thousands) | |||||
Federal | $ | 34,788 | |||
State | 11,122 | ||||
Total | $ | 45,910 | |||
Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
For the Year Ended December 31 | |||||
| 2025 | |||||
(in thousands) | |||||
State | |||||
California | $ | 5,077 | |||
The Company’s deferred tax assets and liabilities are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred tax assets | |||||||||||
| Implicit discounts and adjustments | $ | 12,447 | $ | 10,970 | |||||||
| Compensation and benefit-related accruals | 21,420 | 21,017 | |||||||||
| Professional malpractice liability insurance | 7,135 | 6,872 | |||||||||
| Federal and state net operating loss and state tax credit carryforwards | 7,398 | 3,602 | |||||||||
| Interest limitation carryforward | 1,964 | 2,153 | |||||||||
| Stock awards | 522 | 142 | |||||||||
| Operating lease liabilities | 127,878 | 123,301 | |||||||||
| Research and experimental expenditures | 829 | 9,048 | |||||||||
| Other | 2,873 | 3,206 | |||||||||
| Deferred tax assets | 182,466 | 180,311 | |||||||||
| Valuation allowance | (2,693) | (2,618) | |||||||||
| Deferred tax assets, net of valuation allowance | $ | 179,773 | $ | 177,693 | |||||||
| Deferred tax liabilities | |||||||||||
| Depreciation and amortization | $ | (81,738) | $ | (80,947) | |||||||
| Operating lease right-of-use assets | (116,949) | (113,491) | |||||||||
| Other | (5,872) | (4,223) | |||||||||
| Deferred tax liabilities | (204,559) | (198,661) | |||||||||
| Deferred tax liabilities, net of deferred tax assets | $ | (24,786) | $ | (20,968) | |||||||
The Company’s deferred tax assets and liabilities are included in the consolidated balance sheet captions as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
Non-current deferred tax asset | $ | 24,120 | $ | 4,412 | |||||||
| Non-current deferred tax liability | (48,906) | (25,380) | |||||||||
Net deferred tax liability | $ | (24,786) | $ | (20,968) | |||||||
For the years ended December 31, 2025 and 2024, the Company recorded net valuation allowance increase of $0.1 million and decrease of $0.3 million, respectively. The changes resulted from net changes in state net operating losses.
At December 31, 2025 and 2024, the Company’s net deferred tax liabilities of approximately $24.8 million and $21.0 million, respectively, consist of items which have been recognized for tax reporting purposes, but which will increase tax on returns to be filed in the future. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax assets. This assessment included a review of legal entities with three years of cumulative losses, estimates of projected future taxable income, the effect on future taxable income resulting from the reversal of existing deferred tax liabilities in future periods, and the impact of tax planning strategies that management would and could implement in order to keep deferred tax assets from expiring unused. Although realization is not assured, based on the Company’s assessment, it has concluded that it is more likely than not that such assets, net of the determined valuation allowance, will be realized.
The total state net operating losses are approximately $55.5 million. The Company has U.S. federal net operating loss carryforwards of $20.1 million with indefinite carryforward.
State net operating loss carryforwards expire and are subject to valuation allowances as follows:
| State Net Operating Losses | Gross Valuation Allowance | ||||||||||
| (in thousands) | |||||||||||
| 2026 | $ | 1,262 | $ | 707 | |||||||
| 2027 | 831 | 541 | |||||||||
| 2028 | 220 | 220 | |||||||||
| 2029 | 983 | 672 | |||||||||
Thereafter through 2045 | 52,189 | 43,707 | |||||||||
Total | $ | 55,485 | $ | 45,847 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.