INCOME TAXES

The following table summarizes the provision for income taxes:



	Year Ended December 31,
	2016			2015		2014
Federal:
Current	$	(1,906	)	$	10,143	$	21,633
Deferred	1,920			2,103		(996		)
Provision for Federal income tax expense	14			12,246		20,637

State:
Current	1,001			2,054		2,945
Deferred	290			202		(185		)
Provision for State income tax expense	1,291			2,256		2,760
Provision for income taxes	$	1,305		$	14,502	$	23,397

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,
	2016			2015			2014
Expected income tax expense at federal rate	$	2,381		$	14,671		$	22,545
State tax expense, net of federal deduction benefit	934			1,023			1,660
Dividend received deduction	(217		)	—			(350		)
Prior period adjustment	—			42			—
Section 847 payments	—			(693		)	—
Municipal tax exempt interest	(1,011		)	—			—
Other, net	(782		)	(541		)	(458		)
Reported income tax expense	$	1,305		$	14,502		$	23,397

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 liability:



	December 31,
	2016			2015
Deferred tax assets:
Unearned premiums	$	19,113		$	18,182
Tax-related discount on loss reserve	1,479			936
Bad debt expense	54			51
Other-than-temporary impairment	27			28
Other	507			432
Total deferred tax assets	21,180			19,629
Deferred tax liabilities:
Unrealized gain	(642		)	(1,019		)
Deferred acquisitions costs	(19,586		)	(18,976		)
Capitalized software	(1,505		)	(251		)
Intangible asset	(3,371		)	(1,974		)
Other	(895		)	(433		)
Total deferred tax liabilities	(25,999		)	(22,653		)
Net deferred tax liability	$	(4,819	)	$	(3,024	)

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 2012; therefore, only the 2013 through 2016 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, 2016, we have not taken any uncertain tax positions with regard to our tax returns.