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Income Taxes

3 Months Ended

Mar. 30, 2021

(5) Income Taxes

A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 weeks ended March 30, 2021 and March 31, 2020 is as follows:


	13 Weeks Ended
	March 30, 2021		March 31, 2020
Tax at statutory federal rate	21.0	%	21.0	%
State and local tax, net of federal benefit	3.8		3.8
FICA tip tax credit	(7.3)		(33.1)
Work opportunity tax credit	(0.8)		(4.4)
Stock compensation	(1.6)		(0.8)
Net income attributable to noncontrolling interests	(0.2)		(1.2)
Officers compensation	0.8		0.3
Other	0.5		1.7
Total	16.2	%	(12.7)	%

For the 13 weeks ended March 30, 2021, we recognized income tax expense using an estimated effective annual tax rate. This resulted in an effective tax rate of 16.2%. For the 13 weeks ended March 31, 2020, we recognized income tax expense using a discrete tax calculation as we were unable to reliably estimate our full year effective income tax rate. This was primarily due to the inability to estimate the increased impact on the FICA tip and Work opportunity tax credits on our effective tax rate as a result of the significant decrease in our pre-tax income. This resulted in an effective tax rate benefit of 12.7%. Additionally, the FICA tip and Work opportunity tax credits exceeded our federal tax liability for fiscal year 2020 but we expect to fully utilize these credits in our 2021 tax year.

- 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.

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