Grand Canyon Education, Inc. Income Taxes Disclosure

10. Income Taxes

The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities is principally dependent upon achievement of projected future taxable income. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more-likely-than-not that the Company will realize the benefits of these deductible differences. The Company has no valuation allowance at December 31, 2025 and 2024.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted though income tax expense.

The components of income tax expense (benefit) are as follows:

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A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows:

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Significant components of the Company’s deferred income tax assets and liabilities, included in Deferred income taxes, non-current on the consolidated balance sheets are as follows:

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The net deferred tax liability on the accompanying consolidated balance sheet is comprised of the following:

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The Company recognizes the impact of a tax position in its financial statements if that position is more-likely-than-not to be sustained on audit, based on the technical merits of the position. The Company discloses all unrecognized tax benefits, which includes the reserves recorded for uncertain tax positions on filed tax returns and the unrecognized portion of affirmative claims. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Unrecognized tax benefits as of December 31, 2025 and 2024 were $16,824 and $14,626, respectively.

The reconciliation of the beginning and ending balance of unrecognized tax benefits at December 31, is as follows:

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As of December 31, 2025 and 2024, the unrecognized tax benefit recorded of $16,824 and $14,626, respectively, if reversed, would impact the effective tax rate. At both years ended December 31, 2025 and 2024 the Company had accrued $0, in interest and $0, in penalties.

The Company’s uncertain tax positions were related to tax years that remained subject to examination by tax authorities. As of December 31, 2025, the earliest tax year still subject to examination for federal and state purposes is 2022 and 2020, respectively.

The amount of cash income taxes paid by the Company were as follows:

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