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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Provision for Income Taxes | The provision for income taxes consists of the following:
| Year Ended December 31,
(in millions) | 2021 | 2020 | 2019
Current: |  |  |
Federal | $ | 86 |  | $ | 96 |  | $ | 53 |
State | 28 |  | 30 |  | 12 |
Foreign | 1 |  | 1 |  | — |
Total Current | 115 |  | 127 |  | 65 |
Deferred: |  |  |
Federal | (7) |  | (33) |  | (2) |
State | (3) |  | (9) |  | (5) |
Foreign | (2) |  | — |  | — |
Total Deferred | (12) |  | (42) |  | (7) |
Total | $ | 103 |  | $ | 85 |  | $ | 58 |
U.S. Federal Statutory Income Tax Rate Reconciled to Effective Tax Rate | The U.S. federal statutory income tax rate reconciled to our effective tax rate is as follows:
| Year Ended December 31,
| 2021 | 2020 | 2019
(in millions, except percent) | Pre-Tax Income | Tax Expense/(Benefit) | Percent of Pre-Tax Income (Loss) | Pre-Tax Income | Tax Expense/(Benefit) | Percent of Pre-Tax Income (Loss) | Pre-Tax Income | Tax Expense/(Benefit) | Percent of Pre-Tax Income (Loss)
| $ | 441 |  |  |  | $ | 357 |  |  |  | $ | 270 |  |  |
U.S. federal statutory tax rate |  | $ | 93 |  | 21 | % |  | $ | 75 |  | 21 | % |  | $ | 57 |  | 21 | %
State income taxes, net of federal benefit |  | 32 |  | 7 |  |  | 25 |  | 7 |  |  | 20 |  | 7 |
Tax rate change |  | (1) |  | — |  |  | — |  | — |  |  | — |  | — |
Nondeductible meals, entertainment and penalties |  | 2 |  | — |  |  | — |  | — |  |  | 1 |  | — |
Stock based compensation |  | (2) |  | — |  |  | (2) |  | — |  |  | (1) |  | — |
Uncertain tax positions |  | (1) |  | — |  |  | 1 |  | — |  |  | — |  | — |
Tax credits |  | (7) |  | (2) |  |  | (6) |  | (2) |  |  | (7) |  | (3) |
State and tax return to provision adjustments |  | (10) |  | (2) |  |  | (7) |  | (2) |  |  | (8) |  | (3) |
Other |  | (3) |  | (1) |  |  | (1) |  | — |  |  | (4) |  | (1) |
Total |  | $ | 103 |  | 23 | % |  | $ | 85 |  | 24 | % |  | $ | 58 |  | 21 | %
Significant Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows:
| Year Ended December 31,
(in millions) | 2021 | 2020
Deferred tax assets: |  |
Net operating losses (federal and state) | $ | 3 |  | $ | 3 |
Accrued expenses | 20 |  | 14 |
Accrued workers' compensation costs | 9 |  | 9 |
Recovery credit | 13 |  | 26 |
Operating lease liabilities | 13 |  | 15 |
Stock based compensation | 3 |  | 3 |
Tax benefits relating to uncertain positions | 1 |  | 1 |
Tax credits (federal and state) | 6 |  | 8 |
Total | 68 |  | 79 |
Valuation allowance | (5) |  | (5) |
Total deferred tax assets | 63 |  | 74 |
Deferred tax liabilities: |  |
Depreciation and amortization | (37) |  | (37) |
Deferred service revenues | — |  | (20) |
Prepaid commission expenses | (24) |  | (22) |
Operating lease right-of-use assets | (10) |  | (13) |
Other | (1) |  | (2) |
Total deferred tax liabilities | (72) |  | (94) |
Net deferred tax liabilities | $ | (9) |  | $ | (20) |
Reconciliation of Beginning and Ending Valuation Allowance | A reconciliation of the beginning and ending amount of the valuation allowance is presented in the table below:
| Year Ended December 31,
(in millions) | 2021 | 2020 | 2019
Valuation allowance at January 1 | $ | 5 |  | $ | 5 |  | $ | 7 |
(Credited) Charged to net income | — |  | — |  | (2) |
Valuation allowance at December 31 | 5 |  | 5 |  | 5 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) related to uncertain income tax provisions, which would affect the effective tax rate if recognized, is presented in the table below:
| Year Ended December 31,
(in millions) | 2021 | 2020 | 2019
Unrecognized tax benefits at January 1 | $ | 8 |  | $ | 7 |  | $ | 6 |
Additions for tax positions of prior periods | — |  | 1 |  | 1 |
Additions for tax positions of current period | 1 |  | 1 |  | 1 |
Reductions for tax positions of prior period: |  |  |
Settlements with taxing authorities | — |  | (1) |  | — |
Lapse of applicable statute of limitations | (1) |  | — |  | (1) |
Adjustments to tax positions | (1) |  | — |  | — |
Unrecognized tax benefits at December 31 | $ | 7 |  | $ | 8 |  | $ | 7 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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