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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes by geographic area was, for the years ended December 31:
(in thousands)202120202019
Federal$106,956 $77,195 $46,445 
Foreign9,350 4,190 3,997 
$116,306 $81,385 $50,442 
Income tax expense consisted of the following for the years ended December 31:
(in thousands)202120202019
Current
Federal$16,512 $19,014 $6,976 
Foreign1,947 — — 
State6,560 6,363 3,562 
25,019 25,377 10,538 
Deferred
Federal5,061 (2,519)3,010 
Foreign287 963 874 
State933 (1,195)(194)
6,281 (2,751)3,690 
Income tax expense$31,300 $22,626 $14,228 
The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate for operations were as follows for the years ended December 31:
202120202019
U.S federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of U.S. federal income tax expense4.7 5.0 4.7 
Change in valuation allowance— 0.1 (0.3)
Tax differential on foreign earnings0.5 0.3 0.4 
Non-deductible meals and entertainment0.1 0.4 0.8 
Stock compensation excess tax benefits(0.8)(0.6)0.1 
Uncertain tax positions— 0.3 (0.4)
Provision to return adjustments, net0.4 0.4 0.2 
Global intangible low tax income— 0.9 0.3 
Section 162(m) limitation1.1 0.5 0.3 
Non-controlling interest— — 0.9 
Other income, net(0.1)(0.5)0.2 
Effective rate26.9 %27.8 %28.2 %
The net deferred tax assets and (liabilities) arising from temporary differences was as follows at December 31:
(in thousands)20212020
Deferred income tax assets:
Self insurance reserves$2,138 $4,091 
Contract loss reserves541 703 
Stock-based awards1,633 1,300 
Bonus8,373 6,173 
Accrued vacation1,977 1,741 
Accrued profit sharing2,665 2,476 
Operating lease liabilities5,404 5,715 
Non-U.S. operating loss2,520 3,601 
Other2,628 4,661 
Total deferred income tax assets before valuation allowances27,879 30,461 
Less: valuation allowances(2,593)(2,566)
Total deferred income tax assets25,286 27,895 
Deferred income tax liabilities:
Property and equipment — tax over book depreciation(36,856)(34,439)
Intangible assets — tax over book amortization(2,913)(2,207)
Right-of-use operating lease assets(5,398)(5,702)
Non-U.S. deferred income tax liabilities— (1,322)
Contract revenue adjustment(4,526)(2,128)
Other(213)(436)
Total deferred income tax liabilities(49,906)(46,234)
Net deferred income taxes$(24,620)$(18,339)
The Company determined that it is more-likely-than-not that it will not realize the deferred tax assets on certain Canadian subsidiaries and recorded a valuation allowance against the entire related deferred tax assets for those entities.
As of December 31, 2021, the Company had no undistributed earnings of our Canadian subsidiaries. We expect future earnings to be reinvested. Accordingly, as of December 31, 2021, no expense for U.S. income taxes or foreign withholding taxes was recorded.
The Company is subject to taxation in various jurisdictions. The Company’s 2018 through 2020 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2017 through 2020.
The Company has recorded a liability for unrecognized tax benefits related to tax positions taken on its various income tax returns. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The decrease in the unrecognized tax benefits as of December 31, 2021 was primarily due to the lapses in the applicable statutes of limitations. The total unrecognized tax benefits is expected to be reduced by less than $0.1 million within the next 12 months. Interest and penalties related to uncertain income tax positions are included as a component of income tax expense in the Financial Statements.
The following is a reconciliation of the beginning and ending liability for unrecognized tax benefits at December 31:
(in thousands)20212020
Balance at beginning of period$353 $152 
Gross increases in current period tax positions45 217 
Reductions in tax positions due to lapse of statutory limitations(70)(16)
Balance at end of period328 353 
Accrued interest and penalties at end of period72 69 
Total liability for unrecognized tax benefits$400 $422 
The liability for unrecognized tax benefits, including accrued interest and penalties, was included in other liabilities on the accompanying consolidated balance sheets. The amount of interest and penalties charged or credited to income tax expense as a result of the unrecognized tax benefits was not significant in the years ended December 31, 2021, 2020 and 2019.