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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Federated files a consolidated federal income tax return. Financial statement tax expense is determined under the liability method. Income Tax Provision consisted of the following expense/(benefit) components for the years ended December 31:
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |
Federal |  | $ | 67,745 |  |  | $ | 54,447 |  |  | $ | 106,710 |
State |  | 10,158 |  |  | 7,359 |  |  | 9,446 |
Foreign |  | 2,791 |  |  | (188 | ) |  | 217 |
Total Current |  | 80,694 |  |  | 61,618 |  |  | 116,373 |
Deferred: |  |  |  |  |  |
Federal |  | 6,395 |  |  | 7,616 |  |  | (59,517 | )
State |  | 1,427 |  |  | 1,750 |  |  | 638 |
Foreign |  | (370 | ) |  | 2,891 |  |  | (393 | )
Total Deferred |  | 7,452 |  |  | 12,257 |  |  | (59,272 | )
Total |  | $ | 88,146 |  |  | $ | 73,875 |  |  | $ | 57,101 |
The reconciliation between the statutory income tax rate and the effective tax rate consisted of the following for the years ended December 31:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Expected Federal Statutory Income Tax Rate |  | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Increase/(Decrease): |  |  |  |  |  |
State and Local Income Taxes, net of Federal Benefit |  | 2.4 |  |  | 2.4 |  |  | 1.9 |
Non-Deductible Executive Compensation |  | 0.9 |  |  | 1.1 |  |  | 0.0 |
Federal Rate Adjustment to Deferred Taxes 1 |  | 0.0 |  |  | 0.0 |  |  | (20.2 | )
Other |  | (0.2 | ) |  | 0.4 |  |  | (0.5 | )
Effective Tax Rate |  | 24.1 | % |  | 24.9 | % |  | 16.2 | %
1 | Represents the impact of revaluing the net deferred tax liability due to the enactment of the Tax Act, and includes the federal tax benefit of any state and local deferred taxes.
The effective tax rate for 2018 increased to 24.9% as compared to 2017's rate of 16.2% primarily due to the 2017 recording of a $70.4 million reduction in Federated's net deferred tax liability due to the Tax Act, partially offset by the reduction of the federal statutory income tax rate to a flat 21.0% effective January 1, 2018. The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities consisted of the following at December 31:
(in thousands) |  | 2019 |  |  | 2018 |
Deferred Tax Assets |  |  |  |  |  |
Tax Net Operating Loss Carryforwards |  | $ | 71,724 |  |  | $ | 74,213 |
Compensation Related |  | 15,994 |  |  | 12,514 |
Other |  | 2,897 |  |  | 2,553 |
Total Deferred Tax Assets |  | 90,615 |  |  | 89,280 |
Valuation Allowance |  | (57,790 | ) |  | (56,925 | )
Total Deferred Tax Asset, net of Valuation Allowance |  | $ | 32,825 |  |  | $ | 32,355 |
Deferred Tax Liabilities |  |  |  |
Intangible Assets |  | $ | 191,595 |  |  | $ | 174,812 |
Property and Equipment |  | 5,493 |  |  | 4,646 |
Other |  | 1,119 |  |  | 1,061 |
Total Gross Deferred Tax Liability |  | $ | 198,207 |  |  | $ | 180,519 |
Net Deferred Tax Liability |  | $ | 165,382 |  |  | $ | 148,164 |
Long-Term Deferred Tax Liability, net at December 31, 2019 increased $17.2 million from December 31, 2018 primarily due to an increase in intangible assets (see Note (10) for additional information) and the resulting tax amortization deduction being in excess of book amortization. At December 31, 2019, Federated had deferred tax assets related to state and foreign tax net operating loss carryforwards in certain taxing jurisdictions in the aggregate of $71.7 million. The state net operating losses will expire through 2039, while most foreign net operating losses do not expire. A valuation allowance has been recognized for $49.4 million (or 100%) of the deferred tax asset for state tax net operating losses, and for $8.4 million (or 38%) of the deferred tax asset for foreign tax net operating losses. The valuation allowances were recorded due to management's belief that it is more likely than not that Federated will not realize the full benefit of these net operating losses. For the deferred tax asset, net of valuation allowance related to foreign net operating losses, management believes that it is more likely than not that it will realize the benefit of these net operating losses based on projections of future taxable income for the entities to which these relate. At December 31, 2018, Federated had deferred tax assets related to state and foreign tax net operating loss carryforwards in certain taxing jurisdictions in the aggregate of $74.2 million. The state net operating losses will expire through 2038, while most foreign net operating losses do not expire. A valuation allowance has been recognized for $49.1 million (or 100%) of the deferred tax asset for state tax net operating losses, and for $7.8 million (or 31%) of the deferred tax asset for foreign tax net operating losses. The valuation allowances were recorded due to management's belief that it is more likely than not that Federated will not realize the full benefit of these net operating losses. For the deferred tax asset, net of valuation allowance related to foreign net operating losses, management believes that it is more likely than not that it will realize the benefit of these net operating losses based on projections of future taxable income for the entities to which these relate. Federated's remaining deferred tax assets as of December 31, 2019 and 2018 primarily related to compensation-related expenses that have been recognized for book purposes but are not yet deductible for tax purposes. Management believes that it is more likely than not that Federated will receive the full benefit of these deferred tax assets due to the expectation that Federated will generate taxable income well in excess of these amounts in the years they become deductible. Federated and its subsidiaries file annual income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and in certain foreign jurisdictions. Based upon its review of these filings, there were no material unrecognized tax benefits as of December 31, 2019 or 2018. Therefore, there were no material changes during 2019, and no reasonable possibility of a significant increase or decrease in unrecognized tax benefits within the next twelve months.

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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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