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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The income tax provision consists of the following:
(In millions) | For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Income before provision for income taxes: | $ | 583.8 |  |  | $ | 531.2 |  |  | $ | 474.5 |
Current provision for income taxes: |  |  |  |  |
Federal | 184.6 |  |  | 157.2 |  |  | 127.9 |
State | 13.5 |  |  | 15.8 |  |  | 10.6 |
| 198.1 |  |  | 173.0 |  |  | 138.5 |
Deferred provision for income taxes: |  |  |  |  |
Federal | (88.4 | ) |  | 22.4 |  |  | 33.7 |
State | 2.7 |  |  | 1.8 |  |  | 1.9 |
| (85.7 | ) |  | 24.2 |  |  | 35.6 |
Interest and penalties expense: |  |  |  |  |
Interest | 1.2 |  |  | 1.2 |  |  | 0.7 |
Penalties | — |  |  | — |  |  | — |
| 1.2 |  |  | 1.2 |  |  | 0.7 |
Provision for income taxes | $ | 113.6 |  |  | $ | 198.4 |  |  | $ | 174.8 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities consist of the following:
(In millions) | As of December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 100.4 |  |  | $ | 118.2 |
Stock-based compensation | 14.3 |  |  | 18.3 |
Deferred state net operating loss | 8.1 |  |  | 6.5 |
Other, net | 4.0 |  |  | 11.6 |
Deferred tax assets before valuation allowance | 126.8 |  |  | 154.6 |
Less: valuation allowance | (5.5 | ) |  | — |
Total deferred tax assets | 121.3 |  |  | 154.6 |
Deferred tax liabilities: |  |  |
Valuation of Loans receivable | 300.4 |  |  | 417.8 |
Deferred Loan origination costs | 1.5 |  |  | 2.5 |
Other, net | 6.8 |  |  | 7.4 |
Total deferred tax liabilities | 308.7 |  |  | 427.7 |
Net deferred tax liability | $ | 187.4 |  |  | $ | 273.1 |
The deferred state net operating loss tax asset arising from the operating loss carry forward for state income tax purposes is expected to expire at various times beginning in 2023, if not utilized. We do not anticipate expiration of the net operating loss carry forwards prior to their utilization. Valuation allowance As a result of the enactment of the 2017 Act, the Company established a $5.5 million valuation allowance related to the executive compensation provisions of the law that limit a public entity's ability to deduct compensation for covered employees in excess of $1.0 million for years after December 31, 2017, regardless of the nature of those payments. In prior years, performance-based compensation was excluded from the $1.0 million limitation. This provision does not apply to compensation paid under written binding contracts that were in effect on November 2, 2017 unless such contracts are subsequently materially modified. Due to the lack of guidance for the new executive compensation provisions, the Company has made a reasonable estimate related to stock-based compensation, in accordance with SAB 118, and recorded a $5.5 million adjustment to income tax expense for the year ended December 31, 2017. This estimate may be refined in future periods as further information becomes available. Valuation of Loans receivable The 2017 Act revises the rules associated with the timing of the recognition of income for federal income tax purposes. The 2017 Act requires an accrual method taxpayer to recognize income no later than the taxable year in which such income is recognized as revenue in the financial statements, if the taxpayer is subject to the all events test—a requirement that all the events have occurred that fix the right to receive income, and that the amount can be determined with reasonable accuracy. The Senate Finance Committee intended that the new financial statement conformity requirement not be construed as preventing the use of special methods of accounting provided elsewhere in the Internal Revenue Code. It is unclear if our income recognition method related to the valuation of loans receivable is an allowable exception under the 2017 Act. As the Company is not able to determine a reasonable estimate based on current guidance, we will continue to apply ASC Topic 740, Income Taxes, in accordance with SAB 118 and based on the provisions of the tax laws that were in effect immediately prior to the 2017 Act being enacted. This treatment may change in future periods as further information becomes available. A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. federal statutory income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Effect of the 2017 Act | -17.1 | % |  | — | % |  | — | %
State income taxes | 1.7 | % |  | 2.0 | % |  | 1.6 | %
Excess tax benefits from stock-based compensation plans | -0.4 | % |  | — | % |  | — | %
Other | 0.3 | % |  | 0.3 | % |  | 0.2 | %
Effective income tax rate | 19.5 | % |  | 37.3 | % |  | 36.8 | %
The difference between the U.S. federal statutory income tax rate and our effective income tax rate for 2017 is primarily due to the enactment of the 2017 Act, which resulted in the reversal of $99.8 million of provision for income taxes. While the new federal statutory income tax rate was not effective until January 1, 2018, we were required to revalue deferred taxes and uncertain tax positions as of December 31, 2017 at the new federal statutory income tax rate. Based on currently enacted federal and state statutory income tax rates, we believe our long-term effective income tax rate will decrease from 37% in past years to approximately 23% in 2018 and future years. The effective income tax rate for 2017 was also impacted by the adoption of ASU 2016-09 on January 1, 2017, which changed where we recognize excess tax benefits and deficiencies from stock-based compensation plans in our consolidated financial statements on a prospective basis. We receive a tax deduction upon the vesting of restricted stock and the conversion of restricted stock units to common stock based on the fair value of the shares. The amount that this tax deduction differs from the grant-date fair value that was recognized as stock-based compensation expense is referred to as an excess tax benefit or deficiency. For 2017, excess tax benefits of $2.5 million were recognized in provision for income taxes, thus reducing our effective income tax rate. For 2016 and 2015, excess tax benefits of $27.2 million and $0.3 million, respectively, were recognized in paid-in capital in our consolidated balance sheets, which had no impact on our effective income tax rate. The differences between the U.S. federal statutory income tax rate and our effective income tax rates for 2016 and 2015 are primarily due to state income taxes. The increase in the effective income tax rate for 2016 was primarily due to higher effective income tax rates in certain state tax jurisdictions. The following table is a summary of changes in gross unrecognized tax benefits:
(In millions) | For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Unrecognized tax benefits at January 1, | $ | 27.7 |  |  | $ | 21.8 |  |  | $ | 16.6 |
Additions for tax positions of the current year | 6.7 |  |  | 8.2 |  |  | 7.4 |
Additions for tax positions of prior years | 0.3 |  |  | — |  |  | — |
Reductions for tax positions of prior years | (0.4 | ) |  | — |  |  | — |
Reductions as a result of a lapse of the statute of limitations | (2.4 | ) |  | (2.3 | ) |  | (2.2 | )
Unrecognized tax benefits at December 31, | $ | 31.9 |  |  | $ | 27.7 |  |  | $ | 21.8 |
The total amount of gross unrecognized tax benefit that, if recognized, would favorably affect our effective income tax rate in future periods, was $31.9 million as of December 31, 2017. Accrued interest related to uncertain tax positions was $6.1 million and $4.9 million as of December 31, 2017 and 2016, respectively. We are subject to income tax in federal and state jurisdictions. The IRS has completed their federal tax examinations for years prior to 2014. With respect to state jurisdictions, we are generally no longer subject to tax examinations on returns filed for years prior to 2010.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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