v3.26.3
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, effective January 1, 2025, and applied the amendments retrospectively to each period presented. Adoption did not affect the recognition or measurement of income taxes, and the income tax amounts previously reported for the year ended December 31, 2024 are unchanged.

Income (loss) from continuing operations before income taxes was attributable to domestic operations for the years ended December 31, 2025 and December 31, 2024.
The (benefit) provision for income taxes includes the following components:
Year ended December 31,20252024
Current (Benefit) Expense
Federal$(36)$255 
State(197)(3)
Total Current (Benefit) Expense(233)252 
Deferred Benefit
Federal(6,145)(1,278)
State(384)(148)
Total Deferred Benefit(6,529)(1,426)
Income Tax Benefit$(6,762)$(1,174)
The following is a reconciliation between a federal income tax rate of 21% and the effective tax rate which is derived by dividing the Income tax benefit by the Net loss before taxes. As a result of adopting ASU 2023-09, the disaggregated
components for the year ended December 31, 2024 were recast to conform with the presentation for the year ended December 31, 2025.
Year ended December 31,
20252024
AmountPercentageAmountPercentage
Computed benefit for income taxes at the statutory rate$(1,414)21.0 %$(3,853)21.0 %
Increase (decrease) in income taxes resulting from:
Domestic state and local taxes, net of federal benefit(539)8.0 %(155)0.8 %
Changes in valuation allowances(4,771)70.9 %2,669 (14.5)%
Changes in uncertain tax positions(18)0.3 %1 — %
Nondeductible items98 (1.5)%159 (0.9)%
Adjustments related to the Supplemental Executive Savings Plan (SESP)(118)1.7 %5 — %
Benefit for income taxes$(6,762)100.4 %$(1,174)6.4 %

With respect to the above table, Net loss before taxes was $6,732 and $18,349 for the years ended December 31, 2025 and December 31, 2024, respectively. Percentages are computed as each reconciling amount divided by Net loss before taxes. For the year ended December 31, 2025, the Company's state and local income taxes in Wisconsin comprised more than 50% of the effect reflected in the domestic state and local taxes, net of federal benefit category. For the year ended December 31, 2024, Illinois comprised more than 50% of the effect reflected in the domestic state and local taxes, net of federal benefit category.
The following are the income taxes paid, net of refunds received by the Company for the years ended December 31, 2025 and December 31, 2024.
December 31,20252024
Federal$33 $— 
Domestic state and local:
Pennsylvania(234)$(37)
Wisconsin(101)$(107)
Michigan(37)(33)
New York State(14)(77)
South Carolina1(45)
Illinois43(189)
Maine—(36)
Philadelphia—(37)
Other(66)(80)
Total income taxes paid, net of refunds received$(375)$(641)
The significant components of the Company's deferred tax assets and liabilities for the years ended December 31, 2025 and December 31, 2024 are as follows:
Year ended December 31,20252024
Deferred Tax Assets
Accruals and reserves not currently deductible$2,941 $4,048 
Federal NOL carryover
10,0215,363
State NOL carryovers2,5801,525
Capital loss carryover
320
Accrued and deferred compensation1,3153,190
Prepaid items207352
Lease liability78399
Contract liability—144
Deferred revenues—816
Unrealized loss on investments187827
Other93945
Subtotal before valuation allowance17,45417,609
Less: valuation allowance:
Valuation allowance - ordinary deferred tax assets
(2,121)(6,011)
Valuation allowance - capital deferred tax assets
(187)(827)
Total valuation allowance
(2,308)(6,838)
Total Deferred Tax Assets15,14610,771
Deferred Tax Liabilities
Property and equipment(8,672)(10,435)
Right-of-use asset(497)(887)
Other(5)(6)
Total Deferred Tax Liabilities(9,174)(11,328)
Net Deferred Income Tax Assets (Liabilities)$5,972 $(557)
Deferred tax assets and liabilities reflect temporary differences between financial and tax reporting. As of December 31, 2025 and December 31, 2024, the Company’s deferred tax assets were primarily the result of federal and state net operating losses, accruals, and reserves that had not yet been deducted in determining taxable income. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2025, primarily based on the Aviation Disposition, the Company determined that it no longer required a valuation allowance against its federal deferred tax assets that are ordinary in nature. The Company continues to maintain a valuation allowance against federal deferred tax assets that are capital in nature. Also, as a result of the Aviation Disposition, the Company determined that valuation allowances related to certain state deferred tax assets were no longer necessary and were released, while valuation allowances in the amount of $2,121 related to other state deferred tax assets were maintained.
As of December 31, 2024, management determined that the available negative evidence outweighed the available positive evidence leading management to conclude that it was more likely than not that some deferred tax assets that were ordinary in nature would not be realizable. Therefore, as of December 31, 2024, the Company recorded a valuation allowance of $6,011 against deferred tax assets that are ordinary in nature. The valuation allowance was primarily associated with federal and state net operating losses.
At December 31, 2025 and December 31, 2024, the Company had federal net operating losses of approximately $47,720 and $25,540, respectively, and state net operating losses of approximately $44,616 and $26,036, respectively. As of December 31, 2025 and December 31, 2024, the estimated effective tax rate applicable to the federal and state net operating losses was 21.0% and 5.8%, respectively. Federal net operating losses are not subject to an expiration date but
are subject to an 80% of taxable income limitation, while the Company expects the state net operating losses to begin to expire in 2032. State net operating losses differ with respect to expiration dates and limitations dependent on state specific regulations. The Company has no ongoing federal or state examinations. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2022. With a few exceptions, the Company is no longer subject to state or local income tax examinations for the years prior to 2021.
In February 2017, Air Wisconsin entered into a capacity purchase agreement with United Airlines, Inc. Prior to its termination, a dispute arose under that agreement for which United initiated arbitration proceedings (“United Arbitration”). The arbitrators denied both United and Air Wisconsin relief. With the exception of two states requiring the processing of the amended federal return before the filing of the amended state return, the Company amended the 2021 and 2022 federal and state income tax returns as a result of the United Arbitration. The 2021 amended income tax returns are expected to result in federal and state income tax refunds of approximately $290 and $47, respectively. The 2022 amended income tax returns are expected to result in federal and state income tax refunds of approximately $6,496 and $601, respectively. The Company received the 2021 federal income tax refund of $290 in March 2025. The 2022 federal income tax refund is shown in Other (long-term assets) as of December 31, 2025, and December 31, 2024.
As of December 31, 2025, the Company has received $42 and $284, respectively, of refunds related to the 2021 and 2022 amended state income tax returns. As of December 31, 2025, state income tax refunds from the 2022 and 2021 amended income tax returns yet to be received were recorded in Receivables, net in the amount of $69 and Other (long-term assets) in the amount of $253 in the consolidated balance sheets. As of December 31, 2024, state income tax refunds related to the 2022 and 2021 amended income tax returns yet to be received were recorded in Receivables, net in the amount of $340 and Other (long-term assets) in the amount of $253 in the consolidated balance sheets. The filing of the 2022 amended income tax return also resulted in a federal net operating loss of $14,887, and various state net operating losses totaling approximately $14,200. These net operating losses are included in the amounts referenced in the above paragraph.
Under ASC 740, the accounting guidance related to uncertain tax positions requires that the impact of a tax position be recognized in the financial statements if that position is more likely than not to be sustained on audit, based on the technical merits of the position. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2025 and December 31, 2024 is as follows:
December 31,20252024
Unrecognized tax benefits at the beginning of the year$48 $47 
Gross increases – current year tax provisions—$1 
Gross increases – prior year tax provisions—$— 
Gross decreases – prior year tax provisions(18)$— 
Unrecognized tax benefits at the end of the year$30 $48 
Interest and penalties in year-end balance$30 $48 
For the years ended December 31, 2025 and December 31, 2024, the Company recognized $(18) and $1, respectively, related to interest and penalties on uncertain tax positions.