Income Taxes

The components of the provision (benefit) for income taxes are as follows (in thousands):



	52 Weeks Ended			52 Weeks Ended		52 Weeks Ended
	December 31, 2019			January 1, 2019		January 2, 2018
Current:
Federal	$	3,311		$	3,762	$	5,884
State	1,643			1,800		886
	4,954			5,562		6,770
Deferred:
Federal	(146		)	698		(24,636		)
State	(437		)	399		2,042
	(583		)	1,097		(22,594		)
Income tax provision (benefit)	$	4,371		$	6,659	$	(15,824	)

On December 22, 2017, the Tax Cuts and Jobs Act, (the “Act”) was enacted, reducing the U.S. federal corporate income tax rate from 35% to 21%, among other changes, for tax years beginning after December 31, 2017.

The effective tax rates for the fifty-two weeks ended December 31, 2019, fifty-two weeks ended January 1, 2019 and fifty-two weeks ended January 2, 2018 were (3.8)%, 26.0% and (46.5)%, respectively. The difference between the effective rates and the statutory federal income tax rate is composed of the following items (dollars in thousands):



	52 Weeks Ended					52 Weeks Ended					52 Weeks Ended
	December 31, 2019					January 1, 2019					January 2, 2018
Federal income taxes	$	(23,922	)	21.0	%	$	5,380		21.0	%	$	11,916		35.0	%
State and local income taxes, net of federal tax benefit	1,302			(1.1	)%	1,639			6.4	%	1,688			5.0	%
Goodwill impairment and adjustments to assets held for sale	27,909			(24.5	)%	—			—	%	—			—	%
Targeted job credits	(712		)	0.6	%	(727		)	(2.8	)%	(420		)	(1.2	)%
Tax reform	—			—	%	(291		)	(1.1	)%	(29,111		)	(85.5	)%
Executive compensation disallowed	413			(0.3	)%	362			1.4	%	81			0.2	%
Permanent tax differences and other	(619		)	0.5	%	296			1.1	%	22			—	%
Income tax provision (benefit)	$	4,371		(3.8	)%	$	6,659		26.0	%	$	(15,824	)	(46.5	)%

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



	December 31, 2019			January 1, 2019
Deferred tax assets:
Deferred rent	$	—		$	1,173
Accrued insurance	3,625			3,685
Restaurant closure liabilities	139			652
Net operating loss carryforwards and tax credits	70			122
Deferred income	1,484			1,196
Stock-based compensation	1,122			1,049
Accrued compensation	589			532
Operating lease liabilities	75,330			—
Other, net	542			494
Deferred tax assets	82,901			8,903
Less: valuation allowance	—			—
Net deferred tax assets	82,901			8,903

Deferred tax liabilities:
Property, equipment and intangible assets	(73,473		)	(69,357		)
Operating lease right-of-use assets	(69,930		)	—
Investment in subsidiary	(7,309		)	(7,448		)
Prepaid expenses	(1,574		)	(1,569		)
Other assets	(125		)	—
Deferred tax liabilities	(152,411		)	(78,374		)
Net deferred tax liabilities	$	(69,510	)	$	(69,471	)

The Company maintains deferred tax liabilities related to trademarks and other indefinite-lived assets that are not netted against the deferred tax assets as the reversal of the taxable temporary difference cannot serve as a source for realization of the deferred tax assets because the deferred tax liability will not reverse until some indefinite future period when the assets are either sold or written down due to an impairment.

The Company had no federal net operating loss carryforwards as of both December 31, 2019 and January 1, 2019. State tax credit carryforwards as of December 31, 2019 totaled $0.1 million and begin to expire in 2024. State tax credit carryforwards as of January 1, 2019 totaled $0.1 million and begin to expire in 2024.

As of December 31, 2019 and January 1, 2019, the Company considered the weight of both positive and negative evidence and concluded that it is more likely than not that the Company's deferred tax assets will be realized and no valuation allowance is required.

As of December 31, 2019 and January 1, 2019, the liability for unrecognized tax benefits was $0.2 million, and is included in other non-current liabilities in the consolidated balance sheets. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. During the fifty-two weeks ended December 31, 2019, fifty-two weeks ended January 1, 2019 and fifty-two weeks ended January 2, 2018, the Company did not have any accrued interest and penalties related to unrecognized tax benefits. The Company does not expect any significant increases or decreases within the next twelve months to its unrecognized tax benefits. The total amount of net unrecognized tax benefits that would impact the Company's effective tax rate, if ever recognized, is $0.2 million.

The Company is subject to U.S. and state income taxes. The Company is no longer subject to federal and state income tax examinations for years before 2016 and 2015, respectively. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses and tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss and tax credit carry forward amounts.