HEARTLAND EXPRESS INCHTLD
HEARTLAND EXPRESS INC Income Taxes Disclosure
Income Taxes
Deferred tax assets and liabilities as of December 31 are as follows:
| 2025 | 2024 | |||||||||||||
| Deferred income tax assets: | (in thousands) | |||||||||||||
| Allowance for credit losses | $ | 337 | $ | 501 | ||||||||||
| Accrued expenses | 4,610 | 4,373 | ||||||||||||
| Stock-based compensation | 746 | 187 | ||||||||||||
| Insurance accruals | 15,407 | 14,153 | ||||||||||||
| State net operating loss carryforward | 129 | 865 | ||||||||||||
| Indirect tax benefits of unrecognized tax benefits | 941 | 1,091 | ||||||||||||
| Other | — | — | ||||||||||||
| Total gross deferred tax assets | 22,170 | 21,170 | ||||||||||||
| Less valuation allowance | — | — | ||||||||||||
| Net deferred tax assets | 22,170 | 21,170 | ||||||||||||
| Deferred income tax liabilities: | ||||||||||||||
| Property and equipment | (116,139) | (137,019) | ||||||||||||
| Goodwill and amortizable intangibles | (36,216) | (38,621) | ||||||||||||
| Prepaid expenses | (2,091) | (2,958) | ||||||||||||
| Total gross deferred tax liability | (154,446) | (178,598) | ||||||||||||
| Net deferred tax liabilities | $ | (132,276) | $ | (157,428) | ||||||||||
The deferred tax amounts above have been classified in the accompanying consolidated balance sheets at December 31, 2025 and 2024 as follows:
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Noncurrent assets, net | $ | 1,353 | $ | 946 | ||||||||||
| Long-term liabilities, net | (133,629) | (158,374) | ||||||||||||
| $ | (132,276) | $ | (157,428) | |||||||||||
We have not recorded a valuation allowance against any deferred tax assets at December 31, 2025 and 2024. In management’s opinion, it is more likely than not that we will be able to utilize these deferred tax assets in future periods as a result of our history of profitability, taxable income, and reversal of deferred tax liabilities.
For the years ended December 31, 2025, 2024, and 2023, the geographical breakdown of our income (loss) before income taxes is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| United States | $ | (68,296) | $ | (38,119) | $ | 18,143 | ||||||||||||||
| Foreign | 168 | 1,444 | 1,710 | |||||||||||||||||
| (Loss) Income Before Income Taxes | $ | (68,128) | $ | (36,675) | $ | 19,853 | ||||||||||||||
Income tax expense consists of the following:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Current income taxes: | ||||||||||||||||||||
| Federal | $ | 6,473 | $ | 19,790 | $ | 19,020 | ||||||||||||||
| State and Local | 2,857 | 3,513 | 3,543 | |||||||||||||||||
| Foreign | 146 | (57) | 596 | |||||||||||||||||
| 9,476 | 23,246 | 23,159 | ||||||||||||||||||
| Deferred income taxes: | ||||||||||||||||||||
| Federal | (20,541) | (27,078) | (14,500) | |||||||||||||||||
| State and Local | (4,239) | (3,669) | (3,311) | |||||||||||||||||
| Foreign | (371) | 548 | (270) | |||||||||||||||||
| (25,151) | (30,199) | (18,081) | ||||||||||||||||||
| Total | $ | (15,675) | $ | (6,953) | $ | 5,078 | ||||||||||||||
For the year ended December 31, 2025, following the adoption of ASU 2023-09, our tax provision and effective tax rate differed from the statutory federal rate as follows:
| 2025 | ||||||||||||||
| (in thousands) | (percent) | |||||||||||||
| Tax at U.S. Statutory Rate | $ | (14,307) | 21.0 | % | ||||||||||
State and Local Income Taxes (1) | (1,177) | 1.7 | % | |||||||||||
| Foreign Tax Effects | ||||||||||||||
| Mexico | ||||||||||||||
| Statutory rate differential | 15 | — | % | |||||||||||
| Other | (275) | 0.4 | % | |||||||||||
| Non-Taxable or Non-Deductible items: | ||||||||||||||
| Per Diem | 1,203 | (1.8) | % | |||||||||||
| Other Non- Taxable or Deductible items | 115 | (0.1) | % | |||||||||||
| Other Reconciling Items: | ||||||||||||||
| Changes in Unrecognized Tax Benefits | (816) | 1.2 | % | |||||||||||
| Return to Provision and Def. Rate Adjustment | (433) | 0.6 | % | |||||||||||
| Total Tax Provision and Effective rate | $ | (15,675) | 23.0 | % | ||||||||||
(1) State Taxes of California, Florida, Georgia, Illinois, Pennsylvania, and Virginia made up the majority (greater than 50%) of the tax effect in this category.
For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, tax expense differed from the statutory federal rate as follows:
| 2024 | 2023 | |||||||||||||
| Federal tax at statutory rate (21%) | $ | (7,702) | $ | 4,169 | ||||||||||
| State taxes, net of federal benefit | (403) | 708 | ||||||||||||
| Permanent differences to return | 1,758 | 1,740 | ||||||||||||
| Return to provision adjustment | (719) | (1,482) | ||||||||||||
| Uncertain income tax penalties and interest, net | 25 | (152) | ||||||||||||
| Foreign Rate Differential | 130 | 154 | ||||||||||||
| Other | (42) | (59) | ||||||||||||
| $ | (6,953) | $ | 5,078 | |||||||||||
At December 31, 2025 and December 31, 2024, we had a total of $4.5 million and $5.2 million in gross unrecognized tax benefits, respectively, included in long-term income taxes payable in the consolidated balance sheets. Of this amount, $3.5 million and $4.1 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate as of December 31, 2025 and December 31, 2024, respectively. Unrecognized tax benefits were a net decrease of $0.7 million and a net decrease of $0.3 million during the years ended December 31, 2025 and 2024, respectively. The increased reduction in 2025 associated with unrecognized tax benefits is due to an increase roll off associated with the underlying statue of limitations. This had the effect of increasing the effective rate in 2025 compared to 2024. The total net amount of accrued interest and penalties for such unrecognized tax benefits was $0.9 million and $1.0 million at December 31, 2025 and December 31, 2024, respectively, and is included in long-term income taxes payable in the consolidated balance sheets. Net interest and penalties included in income tax expense for the years ended December 31, 2025, 2024 and 2023 was an expense of $0.1 million, $0.3 million, and zero, respectively. Income tax expense is increased each period for the accrual of interest on outstanding positions and penalties when the uncertain tax position is initially recorded. Income tax expense is reduced in periods by the amount of accrued interest and penalties associated with reversed uncertain tax positions due to lapse of applicable statute of limitations, when applicable or when a position is settled. Income tax expense was reduced during the years ended December 31, 2025, 2024 and 2023 due to reversals of interest and penalties due to lapse of applicable statute of limitations and settlements, net of additions for interest and penalty accruals during the same period. These unrecognized tax benefits relate to risks associated with state income tax filing positions for our corporate subsidiaries.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Balance at January 1, | $ | 5,197 | $ | 5,522 | |||||||
| Additions based on tax positions related to current year | 300 | 37 | |||||||||
| Additions for tax positions of prior years | 79 | — | |||||||||
| Reductions due to lapse of applicable statute of limitations | (1,096) | (362) | |||||||||
| Balance at December 31, | $ | 4,480 | $ | 5,197 | |||||||
The federal statute of limitations remains open for the years 2022 and forward. Tax years 2015 and forward are subject to audit by state tax authorities depending on the tax code and administrative practice of each state.
For the year ended December 31, 2025, following the adoption of ASU 2023-09, our tax payments net of refunds by jurisdiction are as follows:
| 2025 | |||||
| (in thousands) | |||||
| Federal | $ | 6,750 | |||
| State | |||||
| Pennsylvania | 581 | ||||
| Other | 1,890 | ||||
| Foreign | 81 | ||||
| Income Taxes Paid Net of Amounts Refunded | $ | 9,302 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 3, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
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.