Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 756

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1C
Chunk 756
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, our ultimate liability for unpaid losses and loss
adjustment expenses will likely differ from the amount recorded.

Income Taxes

Insurance companies typically pay state premium taxes rather than
state income taxes. However, Direct Auto is subject to state income taxes in the state of Illinois, in addition to state premium taxes.
Additionally, NI Holdings, on a stand-alone basis, pays state income taxes to the state of North Dakota for income or losses generated
as a separate financial entity. State premium taxes are included as a part of amortization of deferred policy acquisition costs. State
income taxes are reported along with federal income taxes as income tax expense (benefit).

The Company did not have any material uncertain tax positions as
of December 31, 2024 and 2023. The Company’s policy is to recognize tax-related interest and penalties accrued related to unrecognized
benefits as a component of income tax expense. The Company did not recognize any tax-related interest and penalties, nor did it have any
tax-related interest or penalties accrued as of December 31, 2024 and 2023.

We account for deferred income taxes using the asset and liability
method. The objective of the asset and liability method is to establish deferred income tax assets and liabilities for the temporary differences
between the financial reporting basis and the income 

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tax basis of our assets and liabilities at enacted tax rates expected to be in effect
when we realize or settle such amounts.

We re-measure existing deferred income tax assets (including loss
carryforwards) and liabilities when a change in tax rate occurs and record an offset for the net amount of the change as a component of
income tax expense from continuing operations in the period of enactment. We also record any change to a previously recorded valuation
allowance as a result of re-measuring existing temporary differences and loss carryforwards as a component of income tax expense from
continuing operations.

The Company has elected to reclassify any tax effects stranded in
accumulated other comprehensive income as a result of a change in income tax rates to retained earnings.

Earnings Per Share

Earnings per share are computed by dividing net income available
to common shareholders for the period by the weighted average number of common shares outstanding for the same period. Unearned shares
related to the Company’s ESOP are not considered outstanding until they are released and allocated to plan participants. Unearned
shares related to the Company’s Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) are
not considered outstanding until