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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax expense were as follows (in thousands):
Year Ended December 31,
 202020212022
 
Current income tax expense (benefit):   
Federal$5,685 $513 $4,293 
State2,146 1,535 2,086 
7,831 2,048 6,379 
Deferred income tax expense (benefit):   
Federal(608)4,948 (36,395)
State(203)515 (6,260)
 (811)5,463 (42,655)
 Income Tax Expense (Benefit)$7,020 $7,511 $(36,276)
    
The tax effects of principal temporary differences are as follows (in thousands):
As of December 31,
 20212022
Deferred tax assets  
Goodwill and intangibles$— $34,001 
Operating lease liability20,717 28,657 
Allowance for doubtful accounts2,061 3,172 
Interest expenses— 1,572 
Restricted stock1,329 1,367 
Accrued vacation and severance768 727 
Investment774 771 
Other716 206 
Stock option compensation expense159 232 
Deferred revenue— 36 
Net operating loss3,338 — 
Total gross deferred tax assets29,862 70,741 
Valuation allowance(743)(547)
Total net deferred tax assets29,119 70,194 
Deferred tax liabilities
Income tax deductible capitalized software development costs(2,121)(1,273)
Operating lease asset(19,442)(27,026)
Property and equipment(10,110)(3,622)
Accounts receivable— (1,434)
Prepaid expenses(1,136)(437)
Goodwill and intangibles(1,302)— 
Other comprehensive income- unrealized gain on interest rate cap(67)(1,047)
Total deferred tax liabilities(34,178)(34,839)
Deferred tax (liabilities) assets, net$(5,059)$35,355 

At December 31, 2022, the Company had state net operating loss carryforwards and federal capital loss carryforwards of $56.4 million and $1.8 million, respectively, which are available to offset future taxable income. The federal capital loss carryforwards will expire in 2026 while the state net operating loss carryforwards will begin to expire in various years from 2036 through 2041. The amount of state net operating losses that can be carried forward indefinitely is $28.6 million. The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended.
Income tax expense (benefit) differs from the amount of tax determined by applying the United States Federal income tax rates to pretax income and loss due to the application of state apportionment laws, permanent tax differences, and other temporary differences (in thousands):
Year Ended December 31,
 202020212022
 Amount%Amount%Amount%
    
Tax expense at statutory rate$5,427 21.00 %$5,305 21.00 %$(31,778)21.00 %
State taxes, net1,156 4.48 %1,576 6.24 %(4,163)2.75 %
Permanent differences491 1.90 %678 2.68 %318 (0.21)%
Equity-based compensation benefits(305)(1.18)%(219)(0.87)%479 (0.32)%
Gain on acquisition— — %— — %(947)0.63 %
Post-employment benefits(67)(0.26)%— — %— — %
Uncertain tax position49 0.19 %— — %— — %
Valuation allowance287 1.11 %206 0.82 %(197)0.13 %
Other(18)(0.07)%(35)(0.14)%12 (0.01)%
 $7,020 27.17 %$7,511 29.73 %$(36,276)23.97 %

    Permanent differences in the table above are mainly attributable to executive and stock compensation, nondeductible meals and entertainment expenses, and non-deductible employer contributions to the American Public Education, Inc. Employee Stock Purchase Plan, or the ESPP.

    There were no material uncertain tax positions as of December 31, 2020, 2021, or 2022. Interest and penalties associated with uncertain income tax positions would be classified as income tax expense. The Company has not recorded any material interest or penalties during any of the years presented.
The Company is subject to U.S. federal income taxes as well as income tax of multiple state jurisdictions. For U.S. federal and state tax purposes, tax years 2019-2021 remain open to examination.