7. INCOME TAXES

We calculate our interim income tax provision in accordance with ASC Topic 270, “Interim Reporting” and ASC Topic 740, “Accounting for Income Taxes.” At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary year to date earnings. The related tax expense or benefit is recognized in the interim period in which it occurs. The effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change is effective. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute income tax expense may change as new events occur, additional information is obtained or the tax environment changes.

On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law substantially amending the Internal Revenue Code of 1986. The TCJA made significant changes to the taxation of corporations such as the reduction of the highest corporate marginal tax rate from 35% to 21%, additional limitations on certain deductions for executive compensation, introducing an additional capital investment deduction, modifying rules for the deduction of interest expense, and modifying the rules regarding the utilization of net operating loss carryforwards. All relevant tax law changes have been and will be incorporated into this and subsequent interim provision calculations. We have made provisional estimates of the impact of the TCJA and, as of the thirty-nine weeks ended October 2, 2018, our accounting for the tax effects of TCJA is incomplete. We will continue to monitor the legislation and its impact on our business, and we will make adjustments to the recorded provisional amounts on the earlier of the period in which additional guidance is obtained and analyzed by year end.

As of October 2, 2018, we had unrecognized tax benefits of approximately $1.5 million, of which approximately $1.1 million, if reversed, would impact our effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is the following (in thousands):

	For the Thirty-Nine Weeks Ended
	October 2, 2018			October 3, 2017
Gross unrecognized tax benefits at beginning of year	$	1,516		$	1,245
Increases for tax positions taken in prior years		8			—
Decreases for tax positions taken in prior years		(49	)		(3	)
Increases for tax positions taken in the current year		58			96
Lapse in statute of limitations		(58	)		(64	)
Gross unrecognized tax benefits at end of year	$	1,475		$	1,274

Our uncertain tax positions are related to tax years that remain subject to examination by tax agencies. As of October 2, 2018, the earliest tax year still subject to examination by the Internal Revenue Service is 2015. The earliest year still subject to examination by a significant state or local taxing jurisdiction is 2013.