Company: KELYB
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000055135-25-000052
Chunk: 25

Company: KELLY SERVICES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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)Other0.3 (6.7)0.3 (7.2)Other income (expense), net$(2.3)$(6.5)$(5.5)$(4.7)

Included in Other for second quarter and June year-to-date 2024 is $7.8 million of transaction costs related to the acquisition of MRP (see Acquisitions and Disposition footnote). 

25 

KELLY SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(UNAUDITED)

14. Income TaxesIncome tax expense was $0.9 million for the second quarter of 2025 and $1.1 million for the second quarter of 2024.  Income tax expense was $2.7 million for June year-to-date 2025 and $5.1 million for June year-to-date 2024.  The quarterly variance was driven by changes in pretax income, changes in the valuation allowance on the tax benefit from the EMEA staffing operations sale, and 2024 non-deductible acquisition costs.  The year-to-date variance was driven by changes in pretax income and 2024 non-deductible acquisition costs.The Company's tax expense is affected by recurring items, such as the amount of pretax income and its mix by jurisdiction, U.S. work opportunity credits and the change in cash surrender value of tax-exempt investments in life insurance policies.  It is also affected by discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, changes in judgment regarding the realizability of deferred tax assets and the tax effects of stock compensation.  The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.  The Company continues to monitor its partial foreign tax credit valuation allowance for potential changes.On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing multiple changes to the U.S. tax code.  The Company is currently evaluating the OBBBA and does not expect any material impacts on its consolidated financial statements and related disclosures.The work opportunity credit program generates a significant tax benefit for the Company. It is a temporary provision in the U.S. tax law and expires for employees hired after 2025. While the work opportunity credit has routinely been extended, it is uncertain