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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes |
8. | Income Taxes
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. On December 22, 2017, the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”) was signed into law. The 2017 Tax Reform Act significantly changes U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate from 35% to 21% beginning in 2018. As a result, we remeasured our deferred tax assets at the new lower corporate income tax rate and recorded a non-cash tax charge of $2.5 million in 2017. Although the $2.5 million non-cash tax charge represents what we believe is a reasonable estimate of the impact of the income tax effect of the 2017 Tax Reform Act on our financial statements as of December 31, 2017, it should be considered provisional. After we finalize certain tax positions when we file our 2017 US tax return, we will be able to conclude whether any further adjustments are required to our net deferred tax asset balance of $4.3 million as of December 31, 2017. Any adjustments to these provisional amounts will be reported as a component of income tax expense in the reporting period the adjustments are made, which will be no later than the fourth quarter of 2018. Significant components of the net deferred tax assets as reflected on the Consolidated Balance Sheets are as follows:
|  | December 31,
|  | 2017 |  | 2016
|  | (in thousands)
Deferred tax liabilities: |  |  |  |
Prepaid assets |  | $ | (3,957 | ) |  | $ | (7,133 | )
Depreciation |  | (2,021 | ) |  | (936 | )
Software development costs |  | (3,732 | ) |  | (3,960 | )
Total deferred tax liabilities |  | (9,710 | ) |  | (12,029 | )
Deferred tax assets: |  |  |  |  |  |
Accrued incentive compensation |  | 3,510 |  |  | 8,590 |
Net operating loss carryforward |  | 774 |  |  | 1,300 |
Workers’ compensation accruals |  | 4,586 |  |  | 7,891 |
Accrued rent |  | 676 |  |  | 1,092 |
Stock-based compensation |  | 4,233 |  |  | 6,217 |
Intangibles |  | 4 |  |  | 618 |
Minority investment impairment |  | 667 |  |  | 1,021 |
Other |  | 212 |  |  | 349 |
Total deferred tax assets |  | 14,662 |  |  | 27,078 |
Valuation allowance |  | (669 | ) |  | (1,024 | )
Total net deferred tax assets |  | 13,993 |  |  | 26,054 |
Net deferred tax assets |  | $ | 4,283 |  |  | $ | 14,025 |
The components of income tax expense are as follows:
|  | Year ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | (in thousands)
Current income tax expense: |  |  |  |  |  |
Federal |  | $ | 30,009 |  |  | $ | 31,045 |  |  | $ | 35,221 |
State |  | 5,988 |  |  | 5,190 |  |  | 5,741 |
Total current income tax expense |  | 35,997 |  |  | 36,235 |  |  | 40,962 |
Deferred income tax (benefit) expense: |  |  |  |  |  |  |  |  |
Federal |  | 9,549 |  |  | 2,641 |  |  | (13,632 | )
State |  | 193 |  |  | 310 |  |  | (1,101 | )
Total deferred income tax (benefit) expense |  | 9,742 |  |  | 2,951 |  |  | (14,733 | )
Total income tax expense |  | $ | 45,739 |  |  | $ | 39,186 |  |  | $ | 26,229 |
In the first quarter of 2016, we prospectively adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting for calendar year 2016. We recognized an income tax benefit of $6.8 million, or $0.16 per diluted share in 2017 and $1.5 million, or $0.04 per diluted in 2016 related to excess tax benefits from the vesting of restricted stock awards and non-qualified stock options. Prior to the adoption of this pronouncement we recognized excess tax benefit as an increase in additional paid in capital of $2.2 million in 2015. Prior periods have not been adjusted, consistent with the provisions of the ASU. The reconciliation of income tax expense computed at U.S. federal statutory tax rates to the reported income tax expense from continuing operations is as follows:
|  | Year ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | (in thousands)
Expected income tax expense at 35% |  | $ | 45,549 |  |  | $ | 36,812 |  |  | $ | 22,967 |
State income taxes, net of federal benefit |  | 4,085 |  |  | 3,684 |  |  | 2,696 |
Nondeductible expenses |  | 2,649 |  |  | 1,669 |  |  | 1,669 |
Section 199 benefits |  | (875 | ) |  | (686 | ) |  | (627 | )
Equity compensation |  | (6,218 | ) |  | (1,338 | ) |  | — |
Research and development credit |  | (634 | ) |  | (751 | ) |  | (530 | )
Disaster employee retention credit |  | (669 | ) |  | — |  |  | — |
Enactment of the 2017 Tax Reform Act |  | 2,559 |  |  | — |  |  | — |
Other, net |  | (707 | ) |  | (204 | ) |  | 54 |
Reported total income tax expense |  | $ | 45,739 |  |  | $ | 39,186 |  |  | $ | 26,229 |
At December 31, 2017, we have net operating loss carryforwards totaling approximately $3.1 million that expire from 2023 to 2030 related to an acquisition that occurred in 2010. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2017, 2016 and 2015, we made no provisions for interest or penalties related to uncertain tax positions. The tax years 2014 through 2016 remain open to examination by the Internal Revenue Service of the United States. The tax years 2013 through 2016 remain open to examination by various state tax authorities.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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