Maximus, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income taxes (Tables)

Income taxes (Tables)

12 Months Ended

Sep. 30, 2017

Components of income from continuing operations before income taxes

The components of income before income taxes and the corresponding provision for income taxes are as follows (in thousands):



	Year ended September 30,
	2017		2016		2015
Income before income taxes:
United States	$	257,910	$	238,871	$	232,359
Foreign	56,325		47,097		27,460
Income before income taxes	$	314,235	$	285,968	$	259,819

Provision for income taxes



	Year ended September 30,
	2017			2016			2015
Current provision:
Federal	$	70,476		$	69,025		$	74,050
State and local	15,594			15,595			15,332
Foreign	11,221			15,536			9,581
Total current provision	97,291			100,156			98,963
Deferred tax expense (benefit):
Federal	5,490			7,778			2,233
State and local	643			902			403
Foreign	(1,371		)	(3,028		)	(1,829		)
Total deferred tax expense (benefit)	4,762			5,652			807
Provision for income taxes	$	102,053		$	105,808		$	99,770

Reconciliation of tax provision using the federal statutory income tax rate to reported provision

The provision for income taxes differs from that which would have resulted from the use of the federal statutory income tax rate as follows (in thousands):



	Year ended September 30,
	2017			2016			2015
Federal income tax provision at statutory rate of 35%	$	109,982		$	100,089		$	90,937
State income taxes, net of federal benefit	10,554			10,723			9,847
Foreign taxation	(6,940		)	(3,976		)	(2,208		)
Permanent items	970			1,284			1,602
Tax credits	(4,851		)	(1,592		)	(961		)
Vesting of equity compensation	(6,569		)	—			—
Other	(1,093		)	(720		)	553
Provision for income taxes	$	102,053		$	105,808		$	99,770

Significant items comprising the Company's deferred tax assets and liabilities

Our net deferred tax position is summarized below (in thousands):



	As of September 30,
	2017			2016
Balance of tax jurisdictions with net deferred tax assets	$	7,691		$	8,644
Balance of tax jurisdictions with net deferred tax liabilities	(20,106		)	(16,813		)
Net deferred tax liabilities	$	(12,415	)	$	(8,169	)

The significant items comprising our deferred tax assets and liabilities as of September 30, 2017 and 2016 are as follows (in thousands):



	As of September 30,
	2017			2016
Net deferred tax assets/(liabilities)
Costs deductible in future periods	$	30,794		$	27,738
Deferred revenue	20,703			23,469
Stock compensation	4,976			5,085
Net operating loss carryforwards	360			1,291
Amortization of goodwill and intangible assets	(36,100		)	(34,484		)
Capitalized software	(9,197		)	(10,126		)
Accounts receivable - unbilled	(12,953		)	(13,810		)
Property and equipment	(3,924		)	(5,517		)
Prepaid expenses	(3,741		)	(1,296		)
Other	(3,333		)	(519		)
	$	(12,415	)	$	(8,169	)

Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits

The reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows (in thousands):



	Year ended September 30,
	2017		2016			2015
Balance at beginning of year	$	448	$	529		$	812
Lapse of statute of limitation	—		—			(200		)
Increases for tax positions taken in current year	185		—			—
Reductions for tax positions of prior years	—		(81		)	(83		)
Balance at end of year	$	633	$	448		$	529