We consider all income sources, including other comprehensive income, in determining the amount of tax expense allocated to continuing operations.

	Year Ended
	January 2,			December 28,		December 29,
	2021			2019		2018
Current:
Federal	$	9,906		$	5,747	$	11,818
State		2,571			2,282		4,416

		12,477			8,029		16,234
Deferred:
Federal		528			3,179		(3,407	)
State		(1,121	)		1,231		(1,555	)

		(593	)		4,410		(4,962	)

Income tax expense	$	11,884		$	12,439	$	11,272

The aggregate amount of income taxes included in the consolidated statements of operations and consolidated statements of shareholders’ equity are as follows (in thousands):

	Year Ended
	January 2,			December 28,			December 29,
	2021			2019			2018
Consolidated statements of operations:
Income tax expense relating to continuing operations	$	11,884		$	12,439		$	11,272

Consolidated statements of shareholders' equity:
Income tax (expense) benefit relating to derivative financial instruments	$	(970	)	$	(974	)	$	1,053

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

	Year Ended
	January 2,			December 28,			December 29,
	2021			2019			2018
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal income tax benefit		3.7	%		4.0	%		4.5	%
Non-deductible expenses		1.0	%		1.6	%		0.9	%
Florida excess tax refund relating to the Tax Cuts and Jobs Act		(1.0	)%		—			—
Excess stock-based compensation tax benefits		(1.4	)%		(3.7	)%		(8.0	)%
Research activities credits		(2.3	)%		(1.2	)%		(0.7	)%
Disaster tax credit for Hurricane Irma		—			—			(0.7	)%
Changes related to state rate changes and U.S. tax reform		—			0.7	%		0.4	%
Other		(0.1	)%		(0.2	)%		(0.1	)%

		20.9	%		22.2	%		17.3	%

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:

	January 2,			December 28,
	2021			2019
	(in thousands)
Deferred tax assets:
Operating lease liability	$	10,609		$	7,328
Advance supplier consideration		2,776			3,527
Other deferrals and accruals, net		5,743			2,533
Stock-based compensation expense		1,772			1,640
Accrued warranty		1,550			1,485
State bonus depreciation and net operating loss carryforwards		2,606			1,705
Derivative financial instruments		—			79
Acquisition costs		1,664			1,305
Allowance for doubtful accounts		1,017			915
Obsolete inventory and UNICAP adjustment		788			606

Total deferred tax assets		28,525			21,123

Deferred tax liabilities:
Trade names and other intangible assets, net		(17,978	)		(20,801	)
Property, plant and equipment		(14,966	)		(12,923	)
Goodwill		(12,596	)		(8,525	)
Operating lease right-of-use asset		(9,742	)		(6,521	)
Derivative financial instruments		(892	)		—
Prepaid expenses		(680	)		(298	)

Total deferred tax liabilities		(56,854	)		(49,068	)

Total deferred tax liabilities, net	$	(28,329	)	$	(27,945	)

We acquired goodwill deductible for tax purposes in the CGI acquisition as the transaction was treated as an acquisition of stock for tax purposes. At the date of the acquisition, the amount of goodwill deductible for tax purposes from the CGI acquisition was $9.3 million. At the time of the acquisition, this goodwill was the same amount for both book and tax purposes and, therefore, no deferred tax asset or liability was recognized. As we amortize this goodwill for tax purposes over its remaining life, which was approximately 7.4 years at the time of the acquisition, we will recognize a deferred tax liability. The unamortized amount of this goodwill was $1.5 million and $2.7 million at January 2, 2021, and December 28, 2019, respectively.

We have goodwill deductible for tax purposes in the WinDoor acquisition as the transaction was an acquisition of stock that was treated as a step-up acquisition of assets and assumption of liabilities pursuant to our election under section 338(h)(10) of the Internal Revenue Code. We are deducting goodwill for tax purposes of $38.9 million from the WinDoor transaction. The unamortized amount of this goodwill was $26.1 million and $28.7 million at January 2, 2021, and December 28, 2019, respectively.

We have goodwill deductible for tax purposes in the US Impact acquisition as the transaction was treated as an acquisition of assets and assumption of liabilities for both book and tax purposes. We expect to be able to deduct goodwill for tax purposes of $569 thousand from the USI transaction. The unamortized amount of this goodwill was $402 thousand and $440 thousand at January 2, 2021, and December 28, 2019, respectively.

We completed the WWS Acquisition, which included its subsidiary, WWS Blocker LLC (“Blocker”), on August 13, 2018. Blocker was a single-purpose U.S. tax blocker which held a 18.06% ownership percentage of the combined ownership of WWS, and for which that portion of the fair value of assets acquired and liabilities assumed in the WWS Acquisition was not eligible for a step-up in basis. We have goodwill deductible for tax purposes in the WWS Acquisition. Goodwill relating to the 81.94% portion of the transaction treated as a step-up acquisition of assets and assumption of liabilities totaled $133.6 million. We expect to be able to deduct this goodwill for tax purposes. The unamortized amount of this goodwill was approximately $112.1 million and $121.0 million at January 2, 2021, and December 28, 2019, respectively. WWS has historical tax goodwill, of which the 18.06% portion of the Blocker treated as an acquisition of stock not eligible for step-up totaled $6.0 million. The unamortized portion of this goodwill was approximately $4.8 million and $5.3 million at January 2, 2021, and December 28, 2019, respectively. This component can continue to be deducted by the Company for tax purposes.

We have goodwill deductible for tax purposes in the NewSouth Acquisition as the transaction was treated as an acquisition of assets and assumption of liabilities for both book and tax purposes. In the transaction, there were no earn-out arrangements or separate asset allocation agreements with sellers that we believe would affect the deductibility of goodwill in the acquisition. As such, we expect to be able to deduct goodwill for tax purposes of $52.1 million. The unamortized amount of this goodwill was $48.9 million at January 2, 2021.

We estimate that we have $2.6 million and $1.7 million, as of January 2, 2021, and December 28, 2019, respectively, of tax-affected state bonus depreciation, operating loss carryforwards, and state research credits. Operating loss carryforwards and state research credits, which together compose an immaterial portion of these assets, expiring at various dates through 2025 and 2034, respectively. We expect to be able to realize the full benefit of these deferred tax assets before their expiration.

We have no valuation allowances on deferred tax assets at January 2, 2021, or December 28, 2019, as management’s assessment of our ability to realize our deferred tax assets is that it is more likely than not that we will generate sufficient future taxable income to realize all of our deferred tax assets.

We adopted ASU 2016-09 effective on January 1, 2017. As a result, excess tax benefits resulting from the exercise of stock options and lapse of restriction on stock awards are now recognized as a discrete item in tax expense, where previously such tax effects had been recognized in additional paid-in-capital. Income tax expense in the years ended January 2, 2021, December 28, 2019, and December 29, 2018, includes excess tax benefits totaling $0.8 million, $2.1 million, and $5.2 million, respectively.

The tax years 2014 to 2020 remain open for examination by the IRS due to the statute of limitations and net operating losses utilized in prior tax years.