10.

Income Taxes

The provision for income taxes from operations is as follows (in thousands):


	Year ended December 31,
	2015		2014			2013
			(As Restated)			(As Restated)
Current:
Federal	$	5,833	$	(7,058	)	$	5,391
State		921		(640	)		1,058

		6,754		(7,698	)		6,449

Deferred:
Federal		1,854		(10,294	)		(720	)
State		1,044		894			(85	)

		2,898		(9,400	)		(805	)

Total (benefit) provision	$	9,652	$	(17,098	)	$	5,644

Deferred income tax assets and liabilities are comprised of the following components (in thousands):


	December 31,
	2015			2014
				(As Restated)
Gross deferred income tax assets:
Workers’ compensation claims liabilities	$	11,190		$	12,168
MCC accrual		3,532			3,282
Safety incentives payable		5,851			3,782
Allowance for doubtful accounts		109			118
Deferred compensation		219			10
Equity based compensation		719			588
Tax effect of unrealized losses, net		(3	)		856
Alternative minimum tax credit carryforward		1,831			1,831
State credit carryforward		712			882
State loss carryforward		0			506
Workers’ opportunity tax credit and EZ credit carryforward		0			2,986
Other		436			126

		24,596			27,135
Less valuation allowance		216			1,078

		24,380			26,057

Gross deferred income tax liabilities:
Tax depreciation in excess of book depreciation		(4,243	)		(3,771	)
Tax amortization of goodwill		(12,395	)		(11,588	)
Other		(57	)		(117	)

		(16,695	)		(15,476	)

Net deferred income tax assets	$	7,685		$	10,581

The effective tax rate for operations differed from the U.S. statutory federal tax rate due to the following:


	Year ended December 31,
	2015			2014			2013
				(As Restated)			(As Restated)
Statutory federal tax rate		35.0	%		(35.0	)%		35.0	%
State taxes, net of federal benefit		4.3			.6			3.4
Valuation allowance on capital loss carryforward and state tax credit carryforward		(2.1	)		(.2	)		(.5	)
Adjustment for final positions on filed returns		(3.5	)		(.8	)		(.3	)
Nondeductible expenses and other, net		6.1			3.6			6.9
Federal tax-exempt interest income		(.1	)		(.2	)		(.2	)
Federal and state tax credits		(14.3	)		(6.9	)		(15.7	)
Other, net		2.1			(1.2	)		(2.1	)

		27.5	%		(40.1	)%		26.5	%

The realization of a significant portion of net deferred tax assets is based in part on our estimates of the timing of reversals of certain temporary differences and on the generation of taxable income before such reversals. At December 31 2015, we maintained a valuation allowance for approximately $0.2 million of state tax benefits that are not expected to be utilized.

Under ASC 740, “Income Taxes,” management evaluates the realizability of the deferred tax assets on a quarterly basis under a “more-likely than not” standard. As part of this evaluation, management reviews all evidence both positive and negative to determine if a valuation allowance is needed. One component of this analysis is to determine whether the Company was in a cumulative loss position for the most recent 12 quarters. The Company was in a cumulative income position for the 12 quarters ended at both December 31, 2015 and December 31, 2014.

The Company is subject to Income taxes in U.S. federal and multiple state and local tax jurisdictions. In the major jurisdictions where it operates, the Company is generally no longer subject to income tax examinations by tax authorities for years before 2012. As of December 31, 2015 and 2014, the Company had no unrecognized tax benefits.

A portion of the consolidated income the Company generates is not subject to state income tax. Depending on the percentage of this income as compared to total consolidated income, the Company’s state effective rate could fluctuate from expectations. As a result of the mix of income subject to state income tax, total state tax expense increased by approximately $1.7 million in 2015, decreased by $720,000 in 2014 and increased by $249,000 in 2013.

The Company’s capital loss carry forward expired at December 31, 2015. At December 31, 2015, the Company did not have a federal general business tax credit carry forward. The Company had an alternative minimum tax credit carry forward of approximately $1.8 million which has an indefinite life and will not expire until utilized.

At December 31, 2015, the Company had state tax credit carry forwards of approximately $1.0 million which expire unless utilized in tax years on or before December 31, 2025.