Income Taxes

The (benefit) provision for income taxes for the fiscal years ended December 27, 2016, December 29, 2015 and December 30, 2014 consisted of the following (in thousands):



	December 27, 2016			December 29, 2015			December 30, 2014
Current:
Federal	$	1,959		$	1,401		$	(3,068	)
State	854			752			498
Deferred:
Federal	(4,603		)	(7,051		)	(6,503		)
State	(953		)	(870		)	627
Income tax benefit	$	(2,743	)	$	(5,768	)	$	(8,446	)

Items of reconciliation to the statutory rate (in thousands):



	December 27, 2016			December 29, 2015			December 30, 2014
Tax computed at U.S. federal statutory rate	$	2,156		$	330		$	(2,371	)
State and local income taxes (net of federal benefit)	56			82			(179		)
Tax credits	(4,590		)	(5,219		)	(5,772		)
Charitable contributions	(324		)	(560		)	(475		)
Change in deferred rate	(453		)	(464		)	1,130
Uncertain tax positions released	(156		)	(71		)	(755		)
Other	568			134			(24		)
Income tax benefit	$	(2,743	)	$	(5,768	)	$	(8,446	)

Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):



	December 27, 2016			December 29, 2015
Assets:
General business credit carryforwards	$	21,271		$	18,915
Insurance reserves	10,903			11,843
Profit sharing and vacation	9,916			8,906
Unfavorable leasehold interests	2,145			2,815
Deferred rent	4,247			3,671
Other	2,112			2,193
Total deferred tax assets	50,594			48,343
Liabilities:
Depreciation and amortization	(226,672		)	(231,500		)
Debt refinancing	(756		)	(1,136		)
Favorable leasehold interests	(2,483		)	(2,915		)
Other	(3,140		)	(2,555		)
Total deferred tax liabilities	(233,051		)	(238,106		)
Net deferred tax liability	$	(182,457	)	$	(189,763	)

In assessing the realizability of deferred tax assets including general business credit carryforwards, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Although realization is not assured, management believes that it is more likely than not that all of the deferred tax assets will be realized and thus, no valuation allowance was provided as of December 27, 2016 and December 29, 2015.

The Company files a consolidated US federal tax return with the parent company, NPC Holdings. The Company allocates taxes between it and the parent company utilizing the separate return method.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows, (in thousands):



	December 27, 2016			December 29, 2015			December 30, 2014
Beginning balance	$	2,685		$	2,795		$	3,977
Lapse of applicable statute of limitations, adjustment to Parent	(2,439		)	(108		)	—
Lapse of applicable statute of limitations	(269		)	—			—
Additional interest / penalties accrued	23			(2		)	143
Adjustments to prior year positions	—			—			(1,325		)
Ending balance	$	—		$	2,685		$	2,795

During the third quarter of fiscal 2016, the Company released a tax reserve of $2.4 million that was established during the Transactions. As this reserve was established related to an exposure for costs originally incurred by NPC Holdings and charged to equity, the release of this reserve was treated as an adjustment to equity.

The Company files income tax returns in the U.S. and various state jurisdictions. As of December 27, 2016, the Company is subject to examination in the U.S. federal tax jurisdiction for the 2013-2015 tax years. The Company is also subject to examination in various state jurisdictions for the 2012-2015 tax years.

At December 27, 2016, the Company had U.S. general business credit carryforwards of $21.3 million which if not used, begin to expire in 2032.