10. Income Taxes

We consider all income sources, including other comprehensive income, in determining the amount of tax benefit (expense) allocated to continuing operations (the “Income Tax Allocation”).

The components of income tax (benefit) expense are as follows (in thousands):


	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Current:
Federal	$	86		$	192		$	—
State		—			—			—

		86			192			—

Deferred:
Federal		(2,265	)		—			(2,086	)
State		(1,195	)		(82	)		(238	)

		(3,460	)		(82	)		(2,324	)

Income tax (benefit) expense	$	(3,374	)	$	110		$	(2,324	)

A reconciliation of the statutory federal income tax rate to our effective rate is provided below:


	Year Ended
	December 28, 2013			December 29, 2012			December 31, 2011
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		3.8	%		3.8	%		4.0	%
Alternative minimum tax		—			2.1	%		—
Non-deductible secondary offering related expenses		1.8	%		—			—
Other		(0.1	%)		(0.9	%)		(0.2	%)
Non-deductible expenses		0.2	%		0.3	%		—
Valuation allowance on deferred tax assets		(55.1	%)		(39.1	%)		(26.7	%)

		(14.4	%)		1.2	%		12.1	%

Our effective combined federal and state tax rate was (14.4%), 1.2% and 12.1%, for the years ended December 28, 2013, December 29, 2012, and December 31, 2011, respectively.

Our income tax benefit was $3.4 million for the year ended December 28, 2013. As we released our valuation allowances on deferred tax assets, we released our valuation allowance as we are no longer in a cumulative loss position and it is more likely than not, that our deferred tax assets will be realized.

Our tax rate is lower than the statutory rate for 2012, as we released a portion of our deferred tax asset valuation allowance to offset our regular tax expense. The $0.1 million of tax expense included in the consolidated statements of operations represents our alternative minimum tax obligation offset with the state tax impact for a change in our state tax rate.

The 12.1% tax rate for the year ended December 31, 2011, relates to the deferred tax impact on the impairment charge related to our trade names. Deferred tax liabilities related to our trade names are not available to be used to offset deferred tax assets when estimating the valuation allowance. All deferred tax assets created in 2011 were fully reserved with additional valuation allowances. Excluding the effects of these items, our 2013, 2012, and 2011 effective tax rates would have been 40.7%, 40.3% and 38.8%, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our net deferred tax liability are as follows:


	December 28, 2013		December 29, 2012
	(in thousands)
Deferred tax assets:
Federal and State net operating loss carry-forwards	$	970	$	7,332
Goodwill		4,152		6,228
Compensation expense		2,606		2,819
Accrued warranty		890		1,381
Obsolete inventory		435		508
Other accruals		260		149
Allowance for doubtful accounts		289		288
AMT tax credits		574		479
Derivative financial instruments		475		—
Amortizable intangible assets		865		—
Valuation allowance		—		(12,902	)

Total deferred tax assets	$	11,516	$	6,282

Deferred tax liabilities:
Other indefinite lived intangible assets	$	14,904	$	14,904
Amortizable intangible assets		—		1,551
Property, plant and equipment		6,349		4,724
Derivative financial instruments		—		7
Deferred finance costs		370		—
Prepaid expenses		510		—

Total deferred tax liabilities	$	22,133	$	21,186

The amount of goodwill deductible for tax purposes was $63.8 million at the time of the 2004 acquisition, of which, $10.7 million and $16.1 million was unamortized as of December 28, 2013, and December 29, 2012, respectively.

The following table shows the current and noncurrent deferred tax (liabilities) assets, recorded on our consolidated balance sheets:


	December 28, 2013			December 29, 2012
	(in thousands)
Current deferred tax asset, (liabilities), net	$	2,763		$	(46	)
Noncurrent deferred tax liabilities, net		(13,380	)		(14,858	)

Total deferred tax liabilities, net	$	(10,617	)	$	(14,904	)

We estimate that we have $4.4 million of tax affected federal net operating loss carryforwards and $1.5 million of state operating loss carryforwards, expiring at various dates through 2031.

We have not recognized any material liability for unrecognized tax benefits; however, should we accrue for such liabilities when and if they arise in the future we will recognize interest and penalties associated with uncertain tax positions as part of our income tax provision.