7. Income Taxes

Income tax expense attributable to income from continuing operations is summarized as follows:

	2013		2012		2011

Current:
Federal	$	11,041	$	18,097	$	9,868
State	2,104		3,267		2,370
Foreign	328		334		393
Total current	13,473		21,698		12,631
Deferred:
Federal	6,451		2,399		6,250
State	1,159		1,658		1,160
Foreign	—		5		(36		)
Total deferred	7,610		4,062		7,374

Total income tax expense	$	21,083	$	25,760	$	20,005

A reconciliation of the U.S. Federal income tax rate of 35% to income tax expense (benefit) expressed as a percent of pretax income from continuing operations follows:

	2013		2012		2011
Current:
Federal income tax at the statutory rate	35.0	%	35.0	%	35.0	%
Increase in income tax expense (benefit)
State and foreign income taxes, net of federal benefits	3.5		4.3		4.4
Jobs tax credits, net	(9.7	)	(2.3	)	(5.9	)
Nondeductible expenses	0.7		0.4		(1.1	)
Reserve for uncertain tax positions	(0.1	)	1.3		—
Other	0.3		(0.1	)	—
	29.7	%	38.6	%	32.4	%

On January 2, 2013, legislation was enacted that reinstated the jobs credit provisions retroactive to January 1, 2012. Under ASC 740, changes to tax laws are not recognized until the enactment date. Accordingly, the net impact of the reinstatement of the jobs credit provisions relative to credits generated during 2012 ($2.9 million), as well as jobs credits generated during 2013 ($3.4 million), were recognized in 2013.

As of December 31, 2013, we have state net operating loss carryforwards of approximately $77 million, which are available to offset future taxable income, if any, of certain entities in certain states. These carryforwards will expire between 2014 and 2033. Application of some of these carryforwards is limited under the change of ownership provisions. These carryforwards have been partially or fully offset by valuation allowances, as our ability to apply these carryforwards may be limited.

As of December 31, 2013, we have federal foreign tax credit carryforwards of approximately $0.9 million. If not used, these carryforwards will expire between 2016 and 2019. These credit carryovers have been fully offset by a valuation allowance as our ability to apply these carryovers is subject to limitation.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:

	2013			2012
Deferred tax assets:
Accounts receivable	$	4,278		$	9,191
Property and equipment	849			922
Workers’ compensation costs	12,035			12,043
Compensated absences	5,665			5,081
Share-based compensation	3,367			2,425
Other insurance reserves	5,577			11,835
Unfavorable lease adjustments	506			857
Other liabilities and reserves	3,975			2,174
Deferred state income tax net operating loss carryforwards	3,611			3,233
Deferred tax credits, foreign tax credit carryforwards and other	1,689			2,123
Total gross deferred tax assets	41,552			49,884
Less valuation allowance	4,478			3,659
Net deferred tax assets	37,074			46,225
Deferred tax liabilities:
Revenue adjustments	—			5,651
Property and equipment	2,799			5,971
Goodwill and other intangible assets	129,828			122,031
Other	720			1,236
Total deferred tax liabilities	133,347			134,889
Net deferred tax liability	$	(96,273	)	$	(88,664	)
Classified as follows:
Current deferred income tax assets	$	19,811		$	17,589
Noncurrent deferred income tax liability	(116,084		)	(106,253		)
Net deferred tax liability	$	(96,273	)	$	(88,664	)

A valuation allowance for deferred tax assets was provided as of December 31, 2013 related to state income tax net operating loss carryforwards and federal foreign tax credit carryovers. The realization of deferred tax assets is dependent upon generating future taxable income when temporary differences become deductible. Based upon the historical and projected levels of taxable income, we believe it is more likely than not that we will realize the benefits of the deductible differences after consideration of the valuation allowance.

A reconciliation of the beginning and ending amount of total unrecognized tax benefits is as follows:

	Dec-31,			Dec-31,			Dec-31,
	2013			2012			2011

Balance at beginning of year	$	2,169		$	804		$	438
Increase related to prior year tax positions	60			1,478			—
Decrease related to prior year tax positions	(21		)	(9		)	(37		)
Increase related to current year tax positions	—			—			536
Settlements	—			—			(22		)
Lapse of statute of limitations	(77		)	(104		)	(111		)
Balance at end of year	$	2,131		$	2,169		$	804

Included in the balance of total unrecognized tax benefits at December 31, 2013 are potential benefits of $0.5 million, which if recognized, would affect the effective tax rate on income from continuing operations for the year ended December 31, 2014.

We file numerous consolidated and separate income tax returns in the U.S. federal and various state and foreign jurisdictions. With few exceptions, we are no longer subject to income tax examinations by the taxing authorities for years prior to 2009. We believe that we have appropriate support for the income tax positions taken and to be taken on our income tax returns and that our accruals for income tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of the tax laws as applied to the facts of each matter. We expect that the amounts of unrecognized tax benefits will be reduced by $0.5 million within the next twelve months.

Total accrued interest and penalties as of December 31, 2013 are approximately $0.4 million and are included in accrued expenses.