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, 2022

Schedule of Components of Income Tax Expense (Benefit)


Table 11.1: Components of Provision for Income Taxes
	For the Year Ended September 30,
	2022		2021		2020
	(in thousands)
Current provision/(benefit):
Federal	$	45,042	$	62,062	$	65,735
State and local	15,371		20,077		28,117
Foreign	2,653		16,919		(2,154)
Total current provision for income taxes	63,066		99,058		91,698
Deferred tax expense/(benefit):
Federal	7,107		(2,527)		(12,984)
State and local	2,130		(590)		(4,246)
Foreign	967		(3,460)		(1,915)
Total deferred tax expense/(benefit)	10,204		(6,577)		(19,145)
Provision for income taxes	$	73,270	$	92,481	$	72,553

Schedule of Income before Income Tax, Domestic and Foreign


Table 11.2: Components of Income before Provision for Income Taxes by Country
	For the Year Ended September 30,
	2022		2021		2020
	(in thousands)
Domestic	$	274,641	$	339,647	$	304,240
Foreign	2,457		44,034		(17,178)
Income before provision for income taxes	$	277,098	$	383,681	$	287,062

Schedule of Effective Income Tax Rate Reconciliation


Table 11.3: Reconciliation of Tax Expense at Statutory Rate to Actual Tax Expense
	For the Year Ended September 30,
	2022			2021			2020
	(dollars in thousands)
Tax expense at statutory rate	$	58,190		$	80,573		$	60,284
Increase/(decrease) due to:
State income taxes, net of federal benefit	14,244			18,350			17,480
Foreign taxation rate differentials	(709)			4,212			(463)
Non-deductible expenses	882			2,254			2,200
Valuation allowance - foreign jurisdictions	4,875			2,285			916
Tax credits	(5,239)			(5,072)			(4,149)

Excess tax expense/(benefits) from stock-based compensation	1,143			(6,008)			(2,038)
Other	(116)			(4,113)			(1,677)
Income tax expense	$	73,270		$	92,481		$	72,553
U.S Federal Statutory tax rate	21.0		%	21.0		%	21.0		%
Effective tax rate	26.4		%	24.1		%	25.3		%

Schedule of Deferred Tax Assets and Liabilities


Table 11.4: Components of Deferred Tax Assets and Liabilities
	As of September 30,
	2022		2021
	(in thousands)
Deferred tax assets/(liabilities):
Costs deductible in future periods	$	36,604	$	28,921
Deferred revenue	7,273		7,878
Stock compensation	4,918		3,679
Capital loss carryforward	2,391		—
Net operating loss carryforwards	6,666		3,618
Amortization of goodwill and intangibles	(198,903)		(203,094)
Capitalized software	(15,445)		(11,343)
Accounts receivable - unbilled	(12,087)		(15,317)
Property and equipment	(2,577)		(910)
Prepaid expenses	(11,522)		(7,913)
Financial instruments	(8,261)		107
Valuation allowance	(8,075)		(3,200)
Other	(2,111)		3,926
Net deferred tax liability	$	(201,129)	$	(193,648)

Our deferred tax assets and liabilities are held in various national and international jurisdictions that do not allow right of offset. Accordingly, our presentation of deferred taxes on our consolidated balance sheets is split between jurisdictions that show a net deferred tax asset and a net deferred tax liability.


Table 11.5: Deferred Tax Assets and Liabilities By Jurisdiction Positions
	As of September 30,
	2022		2021
	(in thousands)
Total of tax jurisdictions with net deferred tax assets	$	4,970	$	990
Total of tax jurisdictions with net deferred tax liabilities	(206,099)		(194,638)
Net deferred tax liabilities	$	(201,129)	$	(193,648)

Summary of Income Tax Contingencies


Table 11.6: Reconciliation of the Beginning and Ending Amounts of Potential Tax Benefits
	For the Year Ended September 30,
	2022		2021		2020
	(in thousands)
Balance at beginning of year	$	12,642	$	1,798	$	3,001
Additions for acquired unrecognized tax benefits	—		11,244		—
Decreases for lapse of statue of limitations	(1,412)		—		—
Decreases for settlements with taxing authorities	(4,785)		—		—
Increases for tax positions taken in current year	2,231		300		770
Decreases for tax positions taken in current year	—		(700)		(1,973)
Balance at end of year	$	8,676	$	12,642	$	1,798