WEYCO GROUP INC Income Taxes Disclosure

13. INCOME TAXES

The provision for income taxes included the following components for the year ended December 31, 2025:

​

​

The provision for income taxes included the following components for the year ended December 31, 2024:

​

​

The foreign component of pre-tax earnings was a loss of ($0.7 million) in 2025 compared to earnings of $0.9 million in 2024.

We intend to indefinitely reinvest the earnings of our non-US subsidiaries. Accordingly, no deferred tax liability has been recorded with respect to these subsidiaries. We have evaluated the earnings of our foreign subsidiaries and have concluded that our foreign operations either have earnings that would result in no tax liability if repatriated, or have cumulative losses and, therefore, do not have undistributed earnings for which a deferred tax liability would be required under ASC 740-30. Should these subsidiaries generate cumulative earnings in the future, we will assess our intent and ability to indefinitely reinvest such earnings outside the United States.

​

As described in Note 2, New Accounting Pronouncements, we have elected to prospectively adopt the guidance in ASU 2023-09, Income Taxes. The following table is a reconciliation of the U.S. federal statutory tax rate of 21 percent to our effective tax rate for the year ended December 31, 2025 in accordance with the guidance of ASU 2023-09.

​

​

The following table is a reconciliation of the U.S. federal statutory tax rate of 21 percent to our effective tax rate for the year ended December 31, 2024, prior to the adoption of ASU 2023-09:

​

​

The components of deferred taxes at December 31, 2025 and 2024 were as follows:

​

​

As of December 31, 2025, we had foreign loss carryforwards totaling approximately $9.1 million, all of which relate to operations in Australia. These loss carryforwards have an indefinite carryforward period and are available to offset future foreign taxable income. We have evaluated the realizability of the related deferred tax assets and concluded that it is more likely than not that the foreign loss

carryforwards will not be realized. As a result, we have recorded a full valuation allowance against these deferred tax assets as of December 31, 2025.

The net deferred income tax liabilities are classified in the Consolidated Balance Sheets as follows:

​

​

In accordance with the guidance in ASU 2023-09, below is a summary of income taxes paid, net of refunds, by jurisdiction for the year ended December 31, 2025:

​

​

For the year ended December 31, 2024, prior to the adoption of ASU 2023-09, cash paid for income taxes, net of refunds, totaled $9.4 million.

​

Uncertain Tax Positions

We account for our uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 provides that the tax effects from an uncertain tax position can be recognized in our consolidated financial statements only if the position is more likely than not of being sustained on audit, based on the technical merits of the position.

The following table summarizes the activity related to our unrecognized tax benefits:

​

​

The unrecognized tax benefits at December 31, 2025 and 2024, both included $0.1 million of interest related to such positions. The unrecognized tax benefits, if ultimately recognized, would reduce our annual effective tax rate. The liabilities for potential interest are included in the Consolidated Balance Sheets at December 31, 2025 and 2024.

We file a U.S. federal income tax return, various U.S. state income tax returns and several foreign returns. In general, the 2021 through 2024 tax years remain subject to examination by those taxing authorities.