U S PHYSICAL THERAPY INC /NVUSPH
U S PHYSICAL THERAPY INC /NV Income Taxes Disclosure
14. Income Taxes
Significant components of deferred tax assets and liabilities included in the consolidated balance sheets as of the periods below were as follows.
| As of the Year Ended |
||||||||
|
December 31, 2025
|
December 31, 2024
|
|||||||
| (In thousands) |
||||||||
|
Deferred tax assets:
|
||||||||
|
Compensation
|
$
|
2,045
|
$
|
2,370
|
||||
|
Provision for credit losses
|
792
|
747
|
||||||
|
Lease obligations - including closed clinics
|
29,888
|
36,205
|
||||||
|
Other
|
94 | - | ||||||
|
Deferred tax assets
|
$
|
32,819
|
$
|
39,322
|
||||
|
Deferred tax liabilities:
|
||||||||
|
Depreciation and amortization
|
$
|
(31,274
|
)
|
$
|
(32,392
|
)
|
||
|
Operating lease right-of-use assets
|
(28,109
|
)
|
(34,221
|
)
|
||||
|
Gain on cash flow hedge
|
(244 | ) | (960 | ) | ||||
|
Change in revaluation of put-right liability
|
(312 | ) | (638 | ) | ||||
|
Other
|
(1,271
|
)
|
(576
|
)
|
||||
|
Deferred tax liabilities
|
(61,210
|
)
|
(68,787
|
)
|
||||
|
Net deferred tax liabilities
|
$
|
(28,391
|
)
|
$
|
(29,465
|
)
|
||
The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment.
As of December 31, 2025, the Company has a federal tax payable of $0.9 million and state tax receivables of $3.1 million. The federal tax payable is included in accrued
expenses and the state income tax receivable is included in other current assets on the accompanying consolidated balance sheets.
For the years ended December 31, 2025, 2024, and 2023 income taxes for financial reporting purposes differ from the amount computed by applying the
statutory federal income tax rate of 21% as shown as in the following table:
|
Year Ended
|
||||||||
|
December 31, 2025
|
||||||||
|
U.S. federal statutory rate
|
$
|
12,472
|
21.0
|
%
|
||||
|
State and local income taxes, net of federal income tax effect (1)
|
5,068
|
8.5
|
%
|
|||||
|
Non-deductible expenses
|
133
|
0.2
|
%
|
|||||
|
Shortfall equity compensation deduction
|
330
|
0.6
|
%
|
|||||
|
Non-deductible executive compensation
|
1,186
|
2.0
|
%
|
|||||
|
Other reconciling items
|
619
|
1.1
|
%
|
|||||
|
Income tax expense
|
$
|
19,808
|
33.4
|
%
|
||||
|
(1)
|
State and local income taxes primarily consist of taxes in Tennessee, Maryland, Pennsylvania, Oregon, Georgia, New Jersey, and Virginia (which collectively represent the majority of this category). |
| Year Ended |
||||||||
|
December 31, 2024
|
||||||||
|
U.S. tax at statutory rate
|
$
|
9,667
|
21.0
|
%
|
||||
|
State income taxes, net of federal benefit
|
2,946
|
6.4
|
%
|
|||||
|
Shortfall equity compensation deduction
|
75
|
0.2
|
%
|
|||||
|
Non-deductible expenses
|
907
|
2.0
|
%
|
|||||
|
Return to provision adjustments
|
1,014 | 2.1 | % | |||||
| Income tax expense |
$
|
14,609
|
31.7
|
%
|
||||
|
Year Ended
|
||||||||
|
December 31, 2023
|
||||||||
|
U.S. tax at statutory rate
|
$
|
8,483
|
21.0
|
%
|
||||
|
State income taxes, net of federal benefit
|
2,135
|
5.3
|
%
|
|||||
|
Shortfall equity compensation deduction
|
123
|
0.3
|
%
|
|||||
|
Non-deductible expenses
|
710
|
1.8
|
%
|
|||||
|
Return to provision adjustments
|
705
|
1.7
|
%
|
|||||
| Income tax expense |
$
|
12,156
|
30.1
|
%
|
||||
Significant components of the provision for income taxes for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
|
December 31, 2025
|
December 31, 2024
|
December 31, 2023
|
||||||||||
|
Current income tax expense:
|
||||||||||||
|
Federal
|
$
|
6,753
|
$
|
5,805
|
$
|
6,996
|
||||||
|
State
|
2,456
|
3,930
|
512
|
|||||||||
|
Total current expense
|
9,209
|
9,735
|
7,508
|
|||||||||
|
Deferred income tax expense:
|
||||||||||||
|
Federal
|
7,471
|
4,006
|
3,819
|
|||||||||
|
State
|
3,128
|
868
|
829
|
|||||||||
|
Total deferred expense
|
10,599
|
4,874
|
4,648
|
|||||||||
|
Total income tax expense
|
$
|
19,808
|
$
|
14,609
|
$
|
12,156
|
||||||
The components of income taxes paid for the period ended December 31, 2025, were as follows:
|
December 31, 2025
|
||||
|
Total Income Taxes Paid
|
$
|
14,348
|
||
|
Federal
|
$
|
9,647
|
||
|
State & Local:
|
||||
|
TN
|
$
|
1,181
|
||
|
Other
|
$
|
3,520
|
||
For 2025, 2024 and 2023, the Company performed a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The
adjustments were immaterial. The Company considers this reconciliation process to be an annual control.
The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely
than not that some portion or all of the 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. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the
deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.
The Company’s U.S. federal returns remain open to examination for and U.S. state jurisdictions are open for periods ranging from .
The Company does not believe that it has any significant uncertain tax positions at December 31, 2025 and December 31, 2024, nor is this expected to
change within the next twelve months due to the settlement and expiration of statutes of limitation.
The Company did not have any
accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2025, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Jun 7, 2017 | |
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.