Limbach Holdings, Inc.LMB

Limbach Holdings, Inc. Income Taxes Disclosure

10-KFiled Mar 10, 20253 min read
Income Taxes
The Company is taxed as a C Corporation.
Provision for Income Taxes
The Company’s provision for income taxes relating to continuing operations consists of the following:
For the Years Ended
(in thousands)December 31, 2024December 31, 2023December 31, 2022
Current tax provision
U.S. Federal$6,902 $5,851 $2,613 
State and local2,541 1,845 695 
Total current tax provision9,443 7,696 3,308 
Deferred tax provision
U.S. Federal16 (253)(584)
State and local(368)(97)85 
Total deferred tax provision(352)(350)(499)
Income tax provision$9,091 $7,346 $2,809 
The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 resulted in effective tax rates on continuing operations of 22.7%, 26.1%, and 29.2%, respectively. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:
For the Years Ended December 31,
202420232022
Federal statutory income tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal tax effect4.3 %4.8 %6.4 %
Stock based compensation – restricted stock(6.6)%(1.1)%1.4 %
Return to provision adjustment0.1 %(0.2)%(0.1)%
Permanent differences4.6 %1.4 %1.3 %
Tax credits(0.3)%(0.5)%(0.9)%
Other(0.4)%0.6 %— %
Effective tax rate22.7 %26.1 %29.2 %
The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. The Company’s 2021 and forward tax returns remain subject to examination by the U.S. federal taxing authorities. The Company’s 2020 and forward tax returns remain subject to examination by the various state taxing authorities.
Deferred Tax Assets (Liabilities)
The significant components of deferred tax assets (liabilities) were as follows:
As of As of December 31,
(in thousands)20242023
Deferred tax assets:
Accrued expenses$649 $699 
Allowance for doubtful accounts100 74 
Intangibles915 435 
Goodwill3,581 3,057 
Startup costs48 57 
Stock-based compensation2,187 1,804 
Research and development expenses1,415 1,276 
Lease liabilities7,018 6,193 
Accrued bonuses and commissions384 424 
Total deferred tax assets16,297 14,019 
Deferred tax liabilities:
Fixed assets(4,386)(3,413)
Right-of-use assets(5,317)(4,566)
   Percentage of completion(1,006)(814)
Interest(57)(47)
Total deferred tax liabilities(10,766)(8,840)
Net deferred tax asset$5,531 $5,179 
In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. After giving consideration to these factors, management concluded that it was more likely than not that the deferred tax assets would be fully realized, and as a result, no valuation allowance against the deferred tax assets was deemed necessary at December 31, 2024 and 2023.
At December 31, 2024 and 2023, the Company had no net operating loss carryforwards.
Liabilities for Uncertain Tax Positions
The Company had no unrecognized tax benefits as of December 31, 2024 and 2023.
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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.

Other Available Disclosures

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