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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted into law. The primary impact to the Company’s financial statements as a result of the CARES Act was the deferral of US corporate income tax payments from the second quarter of 2020 to July 2020, as well as the deferral of employer related payroll tax payments from the second, third and fourth quarters of 2020 with 50% to be paid in the fourth quarter of 2021 and the remaining 50% to be paid in the fourth quarter of 2022. Income before income taxes was taxed under the following jurisdictions:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Domestic |  | $ | 934.3 |  |  | $ | 854.1 |  |  | $ | 762.3 |
Foreign |  | 68.0 |  |  | 95.6 |  |  | 78.2 |
Total |  | $ | 1,002.3 |  |  | $ | 949.7 |  |  | $ | 840.5 |
Components of Income tax expense (benefit) consist of the following:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |  |
Federal |  | $ | 166.5 |  |  | $ | 224.7 |  |  | $ | 192.6 |
State |  | 49.2 |  |  | 56.1 |  |  | 43.3 |
Foreign |  | 18.3 |  |  | 20.0 |  |  | 17.7 |
Total current |  | 234.0 |  |  | 300.8 |  |  | 253.6 |
Deferred: |  |  |  |  |  |
Domestic |  | (18.8) |  |  | (83.0) |  |  | (52.7) |
Foreign |  | (1.4) |  |  | (4.9) |  |  | (3.4) |
Total deferred |  | (20.2) |  |  | (87.9) |  |  | (56.1) |
Income tax expense |  | $ | 213.8 |  |  | $ | 212.9 |  |  | $ | 197.5 |
The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective tax rate was as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Statutory federal income tax rate |  | $ | 210.5 |  |  | 21.0 | % |  | $ | 199.4 |  |  | 21.0 | % |  | $ | 176.5 |  |  | 21.0 | %
State taxes, net of federal effect |  | 36.0 |  |  | 3.6 |  |  | 35.4 |  |  | 3.7 |  |  | 31.1 |  |  | 3.7 |
Excess tax benefit of equity awards |  | (28.8) |  |  | (2.9) |  |  | (26.8) |  |  | (2.8) |  |  | (19.7) |  |  | (2.3) |
Effect of rates different than statutory |  | (0.8) |  |  | (0.1) |  |  | 0.8 |  |  | 0.1 |  |  | 0.6 |  |  | 0.1 |
Tax on foreign earnings |  | 1.0 |  |  | 0.1 |  |  | 2.1 |  |  | 0.2 |  |  | 2.8 |  |  | 0.3 |
Effect of tax law changes |  | (6.8) |  |  | (0.7) |  |  | — |  |  | — |  |  | (1.9) |  |  | (0.2) |
Other |  | 2.7 |  |  | 0.3 |  |  | 2.0 |  |  | 0.2 |  |  | 8.1 |  |  | 0.9 |
Effective tax rate |  | $ | 213.8 |  |  | 21.3 | % |  | $ | 212.9 |  |  | 22.4 | % |  | $ | 197.5 |  |  | 23.5 | %
The tax effect of temporary differences that give rise to net deferred income tax liabilities is presented below. Reclassifications have been made to conform to current year presentation.
|  | December 31,
|  | 2020 |  | 2019
Deferred tax assets: |  |  |  |
Contract liabilities |  | $ | 13.2 |  |  | $ | 46.3 |
Equity compensation plans |  | 20.1 |  |  | 21.1 |
Net operating loss and credit carryforwards, net |  | 22.9 |  |  | 20.1 |
Payroll and benefits |  | 21.8 |  |  | 9.6 |
Operating lease liabilities |  | 47.5 |  |  | 41.0 |
Accounts receivable |  | 26.0 |  |  | 15.6 |
Other |  | 15.9 |  |  | 14.1 |
Total deferred tax assets |  | 167.4 |  |  | 167.8 |
Deferred tax liabilities: |  |  |  |
Acquisition-related intangibles |  | 76.5 |  |  | 112.2 |
Property and equipment |  | 39.9 |  |  | 27.0 |
International investments |  | 19.2 |  |  | 19.2 |
Operating lease right-of-use assets |  | 32.5 |  |  | 33.7 |
Other |  | 23.3 |  |  | 17.5 |
Total deferred tax liabilities |  | 191.4 |  |  | 209.6 |
Deferred tax asset valuation allowance |  | 16.9 |  |  | 16.8 |
Net deferred tax liabilities |  | $ | 40.9 |  |  | $ | 58.6 |
The Company has international income tax net operating losses of $6 million that do not expire and state and international tax credit carryforwards of $23 million, which expire at various dates from 2024 through 2027. Due to the nature of the CDW UK acquisition, the Company has provided US income taxes of $19 million on the excess of the financial reporting value of the investment over the corresponding tax basis. The Company is indefinitely reinvested in its UK business, and therefore will not provide for any US deferred taxes on the earnings of the UK business. The Company is not permanently reinvested in its Canadian business and therefore has recognized deferred tax liabilities of $1 million as of December 31, 2020 related to Canada withholding taxes on earnings of its Canadian business. In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service ("IRS"). In general, the Company is no longer subject to audit by the IRS or state, local, or foreign taxing authorities for tax years through 2014. Various taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its Consolidated Financial Statements. Changes in the Company's unrecognized tax benefits as of December 31, 2020, 2019 and 2018 were as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Balance as of January 1 |  | $ | 17.7 |  |  | $ | 15.1 |  |  | $ | — |
Additions for tax positions related to current year |  | 0.1 |  |  | 2.6 |  |  | 15.1 |
Additions for tax positions related to prior year |  | 0.5 |  |  | — |  |  | — |
Balance as of December 31 |  | $ | 18.3 |  |  | $ | 17.7 |  |  | $ | 15.1 |
As of December 31, 2020, the Company had $18 million of unrecognized tax benefits that, if recognized, would have decreased income taxes and the corresponding effective income tax rate and increased net income. The impact of recognizing these tax benefits, net of the federal income tax benefit related to unrecognized state income tax benefits, would be approximately $15 million.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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