Company: DLX
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000027996-25-000163
Chunk: 22

Company: DELUXE CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 1
Chunk 22
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. These accruals represent the anticipated cash payments necessary to fulfill the remaining severance obligations for employees who have already been terminated, as well as those expected to be terminated under our various initiatives. We expect that the majority of employee reductions and the associated severance payments will be completed by early 2026.Changes in our restructuring and integration accruals were as follows:(in thousands)Employee severance benefitsBalance, December 31, 2024$3,755 Charges6,379 Reversals(308)Payments(4,816)Balance, June 30, 2025$5,010 The charges and reversals shown in the rollforward of our restructuring and integration accruals exclude items that are expensed as incurred, as these items are not included in accrued liabilities on the consolidated balance sheets.

NOTE 9: INCOME TAX PROVISIONOur effective income tax rate for interim periods is based on the estimated annual effective tax rate, adjusted for discrete items occurring within the period. For the six months ended June 30, 2025, our effective income tax rate of 28.4% differed from the federal statutory tax rate of 21.0% mainly due to the impact of foreign income tax expense, including the impact of the repatriation of foreign earnings, as well as corporate state income taxes, the tax impact of non-deductible executive compensation expense, and the benefit of the federal R&D tax credit.For the six months ended June 30, 2025, our effective income tax rate decreased from 33.7% for the same period in 2024. The 2025 rate benefited from lower tax impacts for our foreign operations, non-deductible compensation, and share-based compensation. These benefits were partially offset by an increase in our effective state income tax rate. For the second quarter of 2025, our effective income tax rate was 29.2%, a decrease from 33.7% for the second quarter of 2024, with similar factors contributing to the reduction as those affecting the six-month period.In July 2025, the One Big Beautiful Bill Act, officially titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14", was signed into law. The legislation is a comprehensive tax and spending bill that primarily extends provisions of the 2017 Tax Cuts and Jobs Act that were set to expire and introduces certain tax changes for businesses. Although we are currently evaluating the specific impacts of