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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income Tax Provision The income tax provision consists of the following:
(In millions) | For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Income before provision for income taxes: | $ | 755.1 |  |  | $ | 583.8 |  |  | $ | 531.2 |
Current provision for income taxes: |  |  |  |  |
Federal | 110.9 |  |  | 184.6 |  |  | 157.2 |
State | 19.5 |  |  | 13.5 |  |  | 15.8 |
| 130.4 |  |  | 198.1 |  |  | 173.0 |
Deferred provision for income taxes: |  |  |  |  |
Federal | 35.0 |  |  | (88.4 | ) |  | 22.4 |
State | 14.3 |  |  | 2.7 |  |  | 1.8 |
| 49.3 |  |  | (85.7 | ) |  | 24.2 |
Interest and penalties expense: |  |  |  |  |
Interest | 1.4 |  |  | 1.2 |  |  | 1.2 |
Penalties | — |  |  | — |  |  | — |
| 1.4 |  |  | 1.2 |  |  | 1.2 |
Provision for income taxes | $ | 181.1 |  |  | $ | 113.6 |  |  | $ | 198.4 |
Deferred Taxes 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,
| 2018 |  | 2017
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 110.1 |  |  | $ | 100.4 |
Stock-based compensation | 16.5 |  |  | 14.3 |
Deferred state net operating loss | 4.3 |  |  | 8.1 |
Other, net | 7.0 |  |  | 4.0 |
Deferred tax assets before valuation allowance | 137.9 |  |  | 126.8 |
Less: valuation allowance | — |  |  | (5.5 | )
Total deferred tax assets | 137.9 |  |  | 121.3 |
Deferred tax liabilities: |  |  |
Valuation of Loans receivable | 363.9 |  |  | 300.4 |
Deferred Loan origination costs | 1.5 |  |  | 1.5 |
Other, net | 9.2 |  |  | 6.8 |
Total deferred tax liabilities | 374.6 |  |  | 308.7 |
Net deferred tax liability | $ | 236.7 |  |  | $ | 187.4 |
The deferred state net operating loss tax asset arising from the operating loss carryforward for state income tax purposes is expected to expire at various times beginning in 2026, if not utilized. During 2018, we wrote off $3.4 million of this deferred tax asset as we determined that we would not be able to utilize a state net operating loss carryforward prior to its expiration. We do not anticipate expiration of the remaining net operating loss carryforwards prior to their utilization. Valuation allowance As a result of the enactment of the 2017 Tax Act, we established a provisional valuation allowance in the fourth quarter of 2017 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, qualifying performance-based compensation was excluded from the $1.0 million limitation. Qualifying performance-based compensation paid in 2018 or later under written binding contracts that were in effect on November 2, 2017 will remain excluded from the $1.0 million limitation unless such contracts are subsequently materially modified. Due to the lack of guidance for the new executive compensation provisions, we made a reasonable estimate related to stock-based compensation in accordance with ASU 2018-05 and recorded a provisional valuation allowance at December 31, 2017, which resulted in a $5.5 million provision for income taxes for the year ended December 31, 2017. In the fourth quarter of 2018, as a result of additional analysis and regulatory guidance related to the 2017 Tax Act, we reversed the provisional valuation allowance related to stock-based compensation, which resulted in a $5.5 million reversal of provision for income taxes for the year ended December 31, 2018. As of December 31, 2018 and December 31, 2017, the valuation allowance was $0.0 million and $5.5 million, respectively. Valuation of Loans receivable The 2017 Tax Act revised the rules associated with the timing of the recognition of income for federal income tax purposes. The 2017 Tax 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. As we were not able to determine a reasonable estimate based on current guidance, we continued to apply ASC Topic 740, Income Taxes, in accordance with ASU 2018-05, for the year ended December 31, 2017, based on the provisions of the tax laws that were in effect immediately prior to the 2017 Tax Act being enacted. In the fourth quarter of 2018, as a result of additional analysis and regulatory guidance related to the 2017 Tax Act, we determined that the enactment of the 2017 Tax Act did not impact the tax treatment of our Loans receivable. Effective Income Tax Rate 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,
| 2018 |  | 2017 |  | 2016
U.S. federal statutory income tax rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Effect of the 2017 Tax Act | -0.7 | % |  | -17.1 | % |  | — | %
State income taxes | 3.5 | % |  | 1.7 | % |  | 2.0 | %
Excess tax benefits from stock-based compensation plans | -0.1 | % |  | -0.4 | % |  | — | %
Other | 0.3 | % |  | 0.3 | % |  | 0.3 | %
Effective income tax rate | 24.0 | % |  | 19.5 | % |  | 37.3 | %
U.S. federal statutory income tax rate The enactment of the 2017 Tax Act in December 2017 lowered our federal statutory income tax rate from 35.0% in 2017 and 2016 to 21.0% in 2018. Effect of the 2017 Tax Act While the lower federal statutory income tax rate was not effective until 2018, the 2017 Tax Act resulted in a one-time reversal of $99.8 million of provision for income taxes in 2017 as we were required to revalue deferred taxes and uncertain tax positions at the lower federal statutory income tax rate. In 2018, we reversed the provisional valuation allowance related to stock-based compensation that we had established in 2017 upon enactment of the 2017 Tax Act, which resulted in a $5.5 million reversal of provision for income taxes in 2018. State income taxes The increase in our state income tax rate from 2017 to 2018 was primarily the result of the write-off of a deferred state net operating loss tax asset, an increase in the percentage of income reserved for uncertain tax positions and higher effective income tax rates in certain state tax jurisdictions. Excess tax benefits from stock-based compensation plans The adoption of ASU 2016-09 on January 1, 2017 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 2018 and 2017, excess tax benefits were recognized in provision for income taxes, thus reducing our effective income tax rate. For 2016, excess tax benefits were recognized in paid-in capital in our consolidated balance sheets, which had no impact on our effective income tax rate. Unrecognized Tax Benefits The following table is a summary of changes in gross unrecognized tax benefits:
(In millions) | For the Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Unrecognized tax benefits at January 1, | $ | 31.9 |  |  | $ | 27.7 |  |  | $ | 21.8 |
Additions for tax positions of the current year | 10.2 |  |  | 6.7 |  |  | 8.2 |
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 | (3.4 | ) |  | (2.4 | ) |  | (2.3 | )
Unrecognized tax benefits at December 31, | $ | 38.7 |  |  | $ | 31.9 |  |  | $ | 27.7 |
The total amount of gross unrecognized tax benefit that, if recognized, would favorably affect our effective income tax rate in future periods, was $38.7 million as of December 31, 2018. Accrued interest related to uncertain tax positions was $7.5 million and $6.1 million as of December 31, 2018 and 2017, respectively. We are subject to income tax in federal and state jurisdictions. We are generally no longer subject to tax examinations on federal returns filed for years prior to 2015 and state returns filed for years prior to 2011.

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