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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Components of current and deferred income tax expense (benefit) are as follows ($000’s omitted):
 
202120202019
Current expense (benefit)
Federal$430,686 $159,677 $196,186 
State and other73,671 24,580 21,252 
$504,357 $184,257 $217,438 
Deferred expense (benefit)
Federal$57,743 $116,484 $74,700 
State and other1,425 21,114 30,738 
$59,168 $137,598 $105,438 
Income tax expense (benefit)$563,525 $321,855 $322,876 

The following table reconciles the statutory federal income tax rate to the effective income tax rate:
 
202120202019
Income taxes at federal statutory rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal tax3.3 3.3 3.7 
Federal tax credits(1.2)(4.8)(0.2)
Changes in tax laws, including the Tax Act— — 0.2 
Deferred tax asset valuation allowance(0.8)(0.8)(0.4)
Other0.2 (0.1)(0.2)
Effective rate22.5 %18.6 %24.1 %

The 2021 and 2020 effective tax rates differ from the federal statutory rate primarily due to state income tax expense and benefits associated with federal energy efficient home credits, and changes in valuation allowances relating to projected utilization of certain state net operating loss ("NOL") carryforwards. Income tax expense for 2021 and 2020 includes benefits associated with the extension of federal energy efficient home credits, including $56.8 million in 2020 related to homes closed in prior open tax years. This provision, which had previously expired in 2017, was extended to apply to homes closed through December 31, 2021. The 2019 effective tax rate differs from the federal statutory rate primarily due to state income tax expense on current year earnings, changes in valuation allowances relating to projected utilization of certain state NOL carryforwards, and state tax law changes.

Deferred tax assets and liabilities reflect temporary differences arising from the different treatment of items for tax and accounting purposes. Components of our net deferred tax asset are as follows ($000’s omitted):
 
 At December 31,
 20212020
Deferred tax assets:
Accrued insurance$132,386 $135,703 
Inventory valuation reserves62,806 78,518 
State NOL carryforwards144,746 184,046 
Other73,506 64,030 
413,444 462,297 
Deferred tax liabilities:
Deferred income(367,285)(313,170)
Intangibles and other(47,475)(46,595)
(414,760)(359,765)
Valuation allowance(25,165)(69,813)
Net deferred tax asset (liability)$(26,481)$32,719 
We have state NOLs in various jurisdictions which may generally be carried forward up to 20 years, depending on the jurisdiction. Our state NOL carryforward deferred tax assets will expire if unused at various dates as follows: $28.6 million from 2022 to 2026 and $116.1 million from 2027 and thereafter.

We evaluate our deferred tax assets each period to determine if a valuation allowance is required based on whether it is "more likely than not" that some portion of the deferred tax assets would not be realized. The ultimate realization of these deferred tax assets is dependent upon the generation of sufficient taxable income during future periods. We conduct our evaluation by considering all available positive and negative evidence, including, among other factors, historical operating results, forecasts of future profitability, the duration of statutory carryforward periods, and the outlooks for the U.S. housing industry and broader economy.
The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of our deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.
Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. We had $22.5 million and $30.9 million of gross unrecognized tax benefits at December 31, 2021 and 2020, respectively. If recognized, $17.8 million and $24.4 million, respectively, of these amounts would impact our effective tax rate. Additionally, we had accrued interest and penalties of $2.9 million and $2.8 million at December 31, 2021 and 2020, respectively.

We do not expect the total amount of gross unrecognized tax benefits to increase or decrease by a material amount within the next twelve months. A reconciliation of the change in the unrecognized tax benefits is as follows ($000’s omitted):

 
202120202019
Unrecognized tax benefits, beginning of period$30,855 $40,300 $30,554 
Increases related to positions taken during a prior period1,428 — 2,376 
Decreases related to positions taken during a prior period(8,896)(12,981)(7,918)
Increases related to positions taken during the current period267 11,001 16,332 
Decreases related to settlements with taxing authorities— (7,465)(1,044)
Decreases related to lapse of the applicable statute of limitations(1,118)— — 
Unrecognized tax benefits, end of period$22,536 $30,855 $40,300 

We continue to participate in the Compliance Assurance Process (“CAP”) with the IRS as an alternative to the traditional IRS examination process. Through the CAP program, we work with the IRS to achieve tax compliance by resolving issues prior to filing the tax return. We are also currently under examination by state taxing jurisdictions and anticipate finalizing certain of the examinations within the next twelve months. The outcome of these examinations is not yet determinable, and we are not aware of unrecorded liabilities. The statute of limitations for our major tax jurisdictions remains open for examination for tax years 2017 to 2021.