Income Taxes

3 Months Ended

Mar. 29, 2022

Income Tax Disclosure [Abstract]

Income Taxes

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.” The related tax expense or benefit is recognized in the interim period in which it occurs. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. 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. The accounting estimates used to compute income tax expense may change as new events occur, additional information is obtained or the tax environment changes.

Our effective income tax rate for the thirteen weeks ended March 29, 2022 was a benefit of 116.8% compared to a benefit of 66.3% for the comparable thirteen week period of 2021. The effective tax rate benefit for the thirteen weeks ended March 29, 2022 and March 30, 2021, was different from the statutory tax rate primarily due to FICA tax tip credits.

As of March 29, 2022, we had unrecognized tax benefits of approximately $1.2 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 Thirteen Weeks Ended
	March 29, 2022			March 30, 2021
Beginning gross unrecognized tax benefits	$	1,198		$	1,333
Increases for tax positions taken in prior years		3			—
Decreases for tax positions taken in prior years		(1	)		—
Increases for tax positions taken in the current year		19			22
Ending gross unrecognized tax benefits	$	1,219		$	1,355

Our uncertain tax positions are related to tax years that remain subject to examination by tax agencies. As of March 29, 2022, 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 2017.