Texas Roadhouse, Inc. Income Taxes Disclosure
(9) Income Taxes
All income before taxes is generated by domestic entities. Components of our income tax expense (benefit) for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 were as follows:
Fiscal Year Ended | |||||||||
| December 30, 2025 | | December 31, 2024 | | December 26, 2023 | ||||
Current: | |||||||||
Federal | $ | 32,027 | $ | 63,816 | $ | 21,694 | |||
State |
| 26,205 |
| 28,992 |
| 19,105 | |||
Foreign | 1,164 | 1,140 | 735 | ||||||
Total current |
| 59,396 |
| 93,948 |
| 41,534 | |||
Deferred: | |||||||||
Federal |
| 8,046 | (11,096) |
| 4,518 | ||||
State |
| (1,021) | (2,707) |
| (1,403) | ||||
Total deferred |
| 7,025 |
| (13,803) |
| 3,115 | |||
Total Income tax expense: | |||||||||
Federal | 40,073 | 52,720 | 26,212 | ||||||
State | 25,184 | 26,285 | 17,702 | ||||||
Foreign | 1,164 | 1,140 | 735 | ||||||
Income tax expense | $ | 66,421 | $ | 80,145 | $ | 44,649 | |||
A reconciliation of the statutory federal income tax rate to our effective tax rate for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 is as follows:
Fiscal Year Ended | |||||||||||||||||
December 30, 2025 | December 31, 2024 | December 26, 2023 | |||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||
Tax at statutory federal rate | $ | 100,959 | 21.0 | % | $ | 110,143 | 21.0 | % | $ | 75,248 | 21.0 | % | |||||
Domestic federal: | |||||||||||||||||
Tax credits: | |||||||||||||||||
FICA tip tax credit | (49,672) | (10.3) | (45,425) | (8.7) | (39,714) | (11.1) | |||||||||||
Work opportunity tax credit | (3,999) | (0.8) | (2,867) | (0.5) | (3,697) | (1.0) | |||||||||||
Nontaxable and nondeductible items | 877 | 0.1 | (1,492) | (0.3) | (661) | (0.2) | |||||||||||
State and local tax, net of federal benefit (1) | 17,091 | 3.6 | 18,646 | 3.6 | 12,738 | 3.6 | |||||||||||
Foreign | 1,165 | 0.2 | 1,140 | 0.2 | 735 | 0.2 | |||||||||||
$ | 66,421 | 13.8 | % | $ | 80,145 | 15.3 | % | $ | 44,649 | 12.5 | % | ||||||
(1) For the year ended December 30, 2025, state taxes in make up the majority (greater than 50%) of the tax effect in this category. For the year ended December 31, 2024, state taxes in make up the majority (greater than 50%) of the tax effect in this category. For the year ended December 26, 2023, state taxes in make up the majority (greater than 50%) of the tax effect in this category.
A summary of income taxes paid for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 is as follows:
Fiscal Year Ended | |||||||||
| December 30, 2025 | December 31, 2024 | December 26, 2023 | ||||||
Federal | $ | 45,000 | $ | 59,000 | $ | 19,600 | |||
State (1) | 28,941 | 27,195 | 19,530 | ||||||
Foreign | 1,153 | 1,138 | 731 | ||||||
Income taxes paid | $ | 75,094 | $ | 87,333 | $ | 39,861 | |||
(1) The amount of income taxes paid to any individual state jurisdiction did not meet the 5% disaggregation threshold in any period presented.
Components of deferred tax liabilities, net were as follows:
| December 30, 2025 | | December 31, 2024 | |||
Deferred tax assets: | ||||||
Deferred revenue—gift cards | $ | 43,621 | $ | 35,915 | ||
Insurance reserves | 15,653 | 11,768 | ||||
Other reserves |
| 2,547 |
| 2,027 | ||
Share-based compensation |
| 7,364 |
| 7,635 | ||
Operating lease liabilities | 241,865 | 212,341 | ||||
Deferred compensation |
| 37,012 |
| 26,241 | ||
Other assets |
| 3,556 |
| 4,430 | ||
Total deferred tax asset |
| 351,618 |
| 300,357 | ||
Deferred tax liabilities: | ||||||
Property and equipment |
| (117,272) |
| (91,161) | ||
Goodwill and intangibles |
| (10,025) |
| (8,693) | ||
Operating lease right-of-use asset | (218,163) | (191,065) | ||||
Other liabilities | (20,840) | (17,622) | ||||
Total deferred tax liability |
| (366,300) |
| (308,541) | ||
Net deferred tax liability | $ | (14,682) | $ | (8,184) | ||
We have not provided a valuation allowance for any of our deferred tax assets as their realization is more likely than not.
A reconciliation of the beginning and ending liability for unrecognized tax benefits is as follows:
Fiscal Year Ended | |||||||||
| December 30, 2025 | | December 31, 2024 | | December 26, 2023 | ||||
Beginning balance | $ | 5,261 | $ | 4,782 | $ | 3,925 | |||
Additions to tax positions related to prior years | 279 | 317 | 964 | ||||||
Additions to tax positions related to current year | 660 | 383 | 139 | ||||||
Reductions due to statute expiration | - | - | (246) | ||||||
Reductions due to exam settlement | - | (221) | - | ||||||
Ending balance | $ | 6,200 | $ | 5,261 | $ | 4,782 | |||
As of December 30, 2025, December 31, 2024, and December 26, 2023 the amount of unrecognized tax benefits that would impact the effective tax rate if recognized was $3.6 million, $2.9 million, and $2.5 million, respectively.
For the years ended December 30, 2025, December 31, 2024, and December 26, 2023, the total amount of accrued penalties and interest related to uncertain tax provisions was recognized as a part of income tax expense and these amounts were not material.
All entities for which unrecognized tax benefits exist as of December 30, 2025 possess a December tax year-end. As a result, as of December 30, 2025, the tax years ended December 31, 2024, December 26, 2023, and December 27, 2022 remain subject to examination by all tax jurisdictions. As of December 30, 2025, no audits were in process by a tax jurisdiction that, if completed during the next twelve months, would be expected to result in a material change to our unrecognized tax benefits.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 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.