Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 26

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 26
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 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 nine months ended September 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 nine months ended September 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, share-based compensation, and non-

17

DELUXE CORPORATIONCONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)

deductible compensation. These benefits were partially offset by an increase in our effective state income tax rate. For the third quarter of 2025, our effective income tax rate was 28.5%, a decrease from 33.6% for the third quarter of 2024, with similar factors contributing to the reduction as those affecting the nine-month period.In July 2025, the "One Big Beautiful Bill Act" 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 restores provisions that accelerate deductions for certain business expenses and investments. The impact of these changes during the quarter ended September 30, 2025 was not material to income tax expense and resulted in an increase in net deferred income tax liabilities of approximately $30,000.

NOTE 10: POSTRETIREMENT BENEFITSWe have historically offered certain health care benefits to a large number of our eligible retired U.S. employees. In addition to our retiree health care plan, we also maintain an inactive U.S. supplemental executive retirement plan. Further  information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement Benefits” in the Notes to Consolidated Financial Statements