In conjunction with federal tax reform enacted on December 22, 2017, the SEC provided guidance which allowed subsequent income tax adjustments during and up to a one-year measurement period, with the requirement that the accounting be completed in a period not to exceed one year from the date of enactment. Fiscal 2018 income tax expense includes a tax benefit of $5.6 million recognized subsequent enactment of the Tax Cuts and Jobs Act to remeasure deferred taxes consistent with timing differences reported on the 2017 federal tax return.

The company’s provision for income tax expense (benefit) consists of the following for Fiscal 2020, 2019, and 2018 (amounts in thousands):

	Fiscal 2020			Fiscal 2019		Fiscal 2018
Current Taxes:
Federal	$	64,113		$	23,397	$	11,642
State		15,434			5,539		6,702
		79,547			28,936		18,344
Deferred Taxes:
Federal		(26,112	)		17,335		21,762
State		(5,042	)		1,274		(105	)
		(31,154	)		18,609		21,657
Income tax expense	$	48,393		$	47,545	$	40,001

Income tax expense (benefit) differs from the amount computed by applying the applicable U.S. federal income tax rate of 21% because of the effect of the following items for Fiscal 2020, 2019 and 2018 (amounts in thousands):

	Fiscal 2020			Fiscal 2019			Fiscal 2018
Tax at U.S. federal income tax rate	$	42,149		$	44,538		$	41,404
State income taxes, net of federal income tax benefit		8,209			5,384			5,213
Tax reform impact		—			—			(5,575	)
Net share-based payments (windfalls) shortfalls		(80	)		(828	)		1,639
Other		(1,885	)		(1,549	)		(2,680	)
Income tax expense (benefit)	$	48,393		$	47,545		$	40,001

In Fiscal 2020 and 2019, the most significant difference in the effective rate and the statutory rate was state income taxes. In 2018, the most significant differences in the effective rate and the statutory rate were state income taxes and benefits to adjust the estimated provisional benefit recorded in Fiscal 2017 for tax rate changes enacted in December 2017.

Deferred tax assets (liabilities) are comprised of the following (amounts in thousands):

	January 2, 2021			December 28, 2019
Self-insurance	$	4,806		$	4,882
Compensation and employee benefits		7,698			6,929
Deferred income		5,988			7,488
Loss and credit carryforwards		13,026			13,304
Equity-based compensation		3,977			2,135
Legal accrual		2,867			7,238
Deferred payroll tax under CARES act		7,525			—
Pension and postretirement benefits		2,390			4,336
Financing and operating lease right-of-use liabilities		88,816			102,797
Other		7,028			6,820
Valuation allowance		(1,030	)		(703	)
Deferred tax assets		143,091			155,226
Depreciation		(69,056	)		(67,639	)
Intangibles		(109,824	)		(105,238	)
Financing and operating lease right-of-use assets		(85,720	)		(101,217	)
Hedging		(4,357	)		(560	)
Other		(2,393	)		(1,967	)
Deferred tax liabilities		(271,350	)		(276,621	)
Net deferred tax liability	$	(128,259	)	$	(121,395	)

The company has a deferred tax asset of $3.1 million related to a federal net operating loss carryforward which we expect to fully utilize before expiration. Additionally, the company and various subsidiaries have a net deferred tax asset of $5.3 million related to state net operating loss carryforwards, and $4.6 million for credit carryforwards with expiration dates through Fiscal 2040. The utilization of a portion of these state carryforwards could be limited in the future; therefore, a valuation allowance has been recorded. Should the company determine at a later date that certain of these losses which have been reserved for may be utilized, a benefit may be recognized in the Consolidated Statements of Income. Likewise, should the company determine at a later date that certain of these net operating losses for which a deferred tax asset has been recorded may not be utilized, a charge to the Consolidated Statements of Income may be necessary. See Note 2, Summary of Significant Accounting Policies, for the deferred tax asset valuation allowance analysis.

There are no unrecognized gross tax benefits as of January 2, 2021. The gross amount of unrecognized tax benefits was $0.3 million as of December 28, 2019. This change is due to the expiration of the statute of limitations on previously unrecognized tax benefits. These amounts are exclusive of interest accrued and are recorded in other long-term liabilities on the Consolidated Balance Sheets. There would not be an impact to the effective tax rate for unrecognized tax benefits as there is not a balance at the end of Fiscal 2020.

The company accrues interest expense and penalties related to income tax liabilities as a component of income before taxes. No accrual of penalties is reflected on the company’s balance sheet as the company believes the accrual of penalties is not necessary based upon the merits of its income tax positions. The company had no accrued interest balance at January 2, 2021. The accrued interest balance at December 28, 2019 was $0.1 million.

The company defines the federal jurisdiction as well as various state jurisdictions as “major” jurisdictions. The company is no longer subject to federal examinations for years prior to 2017, and with limited exceptions, for years prior to 2016 in state jurisdictions.

The following is a reconciliation of the total amounts of unrecognized tax benefits for Fiscal 2020, 2019, and 2018 (amounts in thousands):

	Fiscal 2020			Fiscal 2019			Fiscal 2018
Unrecognized tax benefit at beginning of fiscal year	$	306		$	750		$	1,259
Lapses of statutes of limitations		(306	)		(444	)		(509	)
Unrecognized tax benefit at end of fiscal year	$	—		$	306		$	750

At this time, we do not anticipate significant changes to the amount of gross unrecognized tax benefits over the next twelve months.