INCOME TAXES

The following table summarizes the provision for income taxes:



	Year Ended December 31,
	2012			2011			2010
Federal:
Current	$	5,704		$	4,864		$	(843	)
Deferred	(526		)	(656		)	423
Provision for (benefit from) Federal income tax expense	5,178			4,208			(420		)

State:
Current	966			664			8
Deferred	(135		)	56			(71		)
Provision for (benefit from) State income tax expense	831			720			(63		)
Provision for (benefit from) income taxes	$	6,009		$	4,928		$	(483	)

The actual income tax expense differs from the expected income tax expense computed by applying the combined applicable effective federal and state tax rates to income before the provision for income taxes as follows:



	Year Ended December 31,
	2012			2011			2010
Expected income tax expense (benefit) at federal rate	$	5,500		$	4,425		$	(479	)
State tax expense (benefit), net of federal deduction benefit	547			472			(71		)
Dividend received deduction	(42		)	(38		)	(60		)
Other, net	4			69			127
Reported income tax expense (benefit)	$	6,009		$	4,928		$	(483	)

Deferred income taxes, which are included in other assets or other liabilities as appropriate, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The table below summarizes the significant components of our net deferred tax asset:



	December 31,
	2012			2011
Deferred tax assets:
Unearned premiums	$	6,478		$	4,356
Assessments	636			4
Tax-related discount on loss reserve	495			726
Bad debt expense	9			30
Other-than-temporary impairment	56			105
Acquired deferred tax asset	—			172
Other	672			304
Total deferred tax assets	8,346			5,697
Deferred tax liabilities:
Unrealized gain	(1,641		)	(1,471		)
Deferred acquisitions costs	(6,453		)	(4,285		)
Capitalized software	(207		)	(297		)
Other	(185		)	(103		)
Total deferred tax liabilities	(8,486		)	(6,156		)
Less: valuation allowance	—			(172		)
Net deferred tax liability	$	(140	)	$	(631	)

In assessing the net realizable value of deferred tax assets, we consider whether it is more likely than not that we will not realize some portion or all of the deferred tax assets. The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

The statute of limitations related to our consolidated Federal income tax returns and our Florida income tax returns expired for all tax years up to and including 2008; therefore, only the 2009 through 2012 tax years remain subject to examination by taxing authorities. No taxing authorities are currently examining any of our federal or state income tax returns.

UPC Insurance's reinsurance affiliate, which is based in the Cayman Islands, made an irrevocable election under section 953(d) of the U.S. Internal Revenue Code of 1986, as amended, to be treated as a domestic insurance company for U.S. Federal income tax purposes. As a result of this election, our reinsurance subsidiary is subject to United States income tax on its worldwide income as if it were a U.S. corporation.

As of December 31, 2012, we have not taken any uncertain tax positions with regard to our tax returns.