INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income taxes attributable to continuing operations consist of the following (amounts in millions):


	For the Years Ended December 31,
	2021		2020		2019
Current income tax expense/(benefit):
Federal	$	20.3	$	41.6	$	24.2
State and local	5.2		10.6		4.8
	25.5		52.2		29.0
Deferred income tax expense/(benefit):
Federal	35.9		(22.5)		9.5
State and local	8.7		(4.1)		4.0
	44.6		(26.6)		13.5
Income tax expense	$	70.1	$	25.6	$	42.5

Total income tax expense for the years ended December 31, 2021, 2020 and 2019 was allocated as follows (amounts in millions):


	For the Years Ended December 31,
	2021		2020		2019
Income from continuing operations	$	70.1	$	25.6	$	42.5
Interest expense	0.1		0.2		0.3
Goodwill	3.1		—		0.9
Total	$	73.3	$	25.8	$	43.7

Schedule of Sources of Tax Effects

A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21% to income before income taxes is as follows:


	For the Years Ended December 31,
	2021		2020		2019
Income tax expense at U.S. federal statutory rate	21.0	%	21.0	%	21.0	%
State and local income taxes, net of federal income tax benefit (1)	5.0		2.4		4.8
Excess tax benefits from share-based compensation (1)	(2.1)		(12.7)		(2.2)
Non-deductible executive compensation	1.2		2.1		1.6
Other items, net (2)	(0.1)		(0.6)		(0.3)
Income tax expense	25.0	%	12.2	%	24.9	%

(1)On August 10, 2020, Paul B. Kusserow, Chief Executive Officer and Chairman of the Board of Amedisys, exercised 500,000 stock options previously awarded to him under our 2008 Omnibus Incentive Compensation Plan. We recognize compensation expense for stock option awards on a straight-line basis over the requisite service period for each separately vesting portion of the award in accordance with ASC 718, Compensation: Stock Compensation; however, the income tax deduction related to stock options is not recognized until the stock option exercise date. As a result, for awards that are expected to result in a tax deduction, a deferred tax asset is created as the entity recognizes compensation expense for U.S. GAAP purposes. If the tax deduction exceeds the cumulative U.S. GAAP compensation expense for the award, the tax benefit associated with any excess deduction is recognized as an income tax benefit in the statement of operations, resulting in a reduction of the effective tax rate. Mr. Kusserow's stock option exercise produced a $92.1 million tax deduction in excess of U.S. GAAP compensation expense, resulting in a $19.4 million federal income tax benefit and a $4.6 million state and local income tax benefit for the year ended December 31, 2020.

(2)Includes various items such as non-deductible expenses, non-taxable income, tax credits, valuation allowance, uncertain tax positions and return-to-accrual adjustments.

Schedule of Net Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) consist of the following components (amounts in millions):


	As of December 31,
	2021		2020
Deferred tax assets:
Accrued payroll & employee benefits	$	13.2	$	15.9
Workers’ compensation	10.5		9.6
Share-based compensation	6.2		5.1
Legal & compliance matters	6.2		7.0
Lease liability	27.3		25.2
Provider relief fund advance (1)	—		15.6
Deferred social security taxes (2)	6.9		14.3
Net operating loss carryforwards	13.6		2.4
Tax credit carryforwards	2.5		2.9
Other assets	0.5		0.6
Gross deferred tax assets	86.9		98.6
Less: valuation allowance	(3.3)		(0.1)
Net deferred tax assets	83.6		98.5
Deferred tax liabilities:
Property and equipment	(8.1)		(3.8)
Amortization of intangible assets	(32.3)		(11.8)
Deferred revenue	(4.5)		(9.0)
Investment in partnerships	(10.8)		—
Right-of-use asset	(26.7)		(24.9)
Other liabilities	(0.9)		(1.0)
Gross deferred tax liabilities	(83.3)		(50.5)
Deferred income taxes	$	0.3	$	48.0

(1)In April 2020, we received approximately $100 million from the Provider Relief Fund established under the CARES Act. As of December 31, 2020, we recorded a liability related to the funds that we did not expect to utilize totaling $60 million, which was reflected in the Provider Relief Fund Advance account in current liabilities within our consolidated balance sheet. For income tax purposes, the Company recognized the $60 million as income upon receipt, resulting in a deferred tax asset as of December 31, 2020. During 2021, we repaid the unutilized funds, resulting in an income tax deduction, and reduced the related deferred tax asset to zero as of December 31, 2021.

(2)The CARES Act provided for the deferral of the employer share of social security tax (6.2%), effective for payments due after the enactment date through December 31, 2020. Fifty percent of the deferred payroll taxes were due on December 31, 2021 with the remaining amounts due on December 31, 2022. As of December 31, 2020 and December 31, 2021, the Company had deferred social security taxes of $55 million and $27 million, respectively, reflected within our consolidated balance sheets. For income tax purposes, the deferred social security taxes are deductible when paid on December 31, 2021 and December, 31, 2022, resulting in a deferred tax asset at December 31, 2020 and December 31, 2021 for the unpaid social security taxes.

Schedule of Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (amounts in millions):


	For the Years Ended December 31,
	2021		2020		2019
Balance at beginning of period	$	2.7	$	2.7	$	2.7
Additions for tax positions related to current year	—		—		—
Additions for tax positions related to prior year	—		—		—
Reductions for tax positions related to prior years	—		—		—
Lapse of statute of limitations	—		—		—
Settlements	—		—		—
Balance at end of period	$	2.7	$	2.7	$	2.7