(

) Income Taxes

The components of the provision for income taxes are as follows:

	Year Ended
	September 28,			September 29,			September 30,
(Dollars in thousands)	2019			2018			2017
Current:
Federal	$	(126	)	$	8,265		$	8,269
State		185			906			848
		59			9,171			9,117
Deferred:
Federal		1,649			(2,862	)		2,455
State		149			55			48
		1,798			(2,807	)		2,503

Income taxes	$	1,857		$	6,364		$	11,620

Effective income tax rate		24.9	%		14.9	%		34.0	%

The reconciliation between income taxes computed at the federal statutory rate and the provision for income taxes is as follows:

	Year Ended
(Dollars in thousands)	September 28, 2019					September 29, 2018					September 30, 2017
Provision for income taxes at federal statutory rate	$	1,566		21.0	%	$	10,444		24.5	%	$	11,959		35.0	%
State income taxes, net of federal tax benefit		297		4.0			739		1.7			598		1.8
Stock-based compensation		90		1.2			(634	)	(1.5	)		-		-
Valuation allowance		24		0.3			(18	)	(0.0	)		(29	)	(0.1	)
Federal tax return true-up		(142	)	(1.9	)		(147	)	(0.3	)		-		-
Change in federal tax rate - Tax Cuts and Jobs Act		-		-			(3,307	)	(7.8	)		-		-
Qualified production activities deduction		-		-			(832	)	(2.0	)		(768	)	(2.2	)
Other, net		22		0.3			119		0.3			(140	)	(0.5	)
Provision for income taxes	$	1,857		24.9	%	$	6,364		14.9	%	$	11,620		34.0	%

The components of deferred tax assets and liabilities are as follows:

	September 28,			September 29,
(In thousands)	2019			2018
Deferred tax assets:
Defined benefit plans	$	2,661		$	2,302
Stock-based compensation		1,259			1,120
Accrued expenses and asset reserves		1,207			1,939
Federal net operating loss carryforward		363			-
State net operating loss carryforwards and tax credits		120			233
Valuation allowance		(257	)		(233	)
Deferred tax assets		5,353			5,361

Deferred tax liabilities:
Plant and equipment		(10,625	)		(9,490	)
Prepaid insurance		(1,311	)		(1,041	)
Goodwill		(317	)		(170	)
Deferred tax liabilities		(12,253	)		(10,701	)
Net deferred tax liability	$	(6,900	)	$	(5,340	)

December 22, 2017,

the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other changes, reduced the federal statutory corporate tax rate from

35%

21%

effective

January 1, 2018.

Since our fiscal year ends on the Saturday closest to

September 30

rather than the calendar year, we are subject to IRS rules relating to transitional income tax rates. Based on these rules, our federal statutory rate was

24.5%

for fiscal

2018

and is

21%

for fiscal

2019

and beyond. We remeasured our deferred tax assets and liabilities and adjusted our estimated annual federal income tax rate to incorporate the lower corporate tax rate provided for under the Act in our

first

quarter tax provision for fiscal

2018,

which resulted in a

$3.3

million reduction in income tax expense for

2018.

As of

September 28, 2019

and

September 29, 2018,

we recorded deferred tax liabilities (net of valuation allowances) of

$6.9

million and

$5.3

million, respectively, in other liabilities on our consolidated balance sheet. We have

$1.7

million of federal net operating loss carryforwards (“NOLs”) and

$2.2

million of state NOLs that begin to expire in

2022,

but principally expire between

2022

and

2034.

We have also recorded deferred tax assets of

$8,000

for state tax credits that expire in

2020.

The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we

longer believe it is more likely than

not

that they will be fully realized. As of

September 28, 2019,

we recorded a valuation allowance of

$257,000

pertaining to various state NOLs and tax credits that were

not

expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances and would be reduced should we utilize the state NOLs and tax credits against which an allowance had previously been provided or determine that such utilization was more likely than

not.

The

$24,000

increase in the valuation allowance during

2019

is primarily due to state NOLs for which a tax benefit is

not

expected to be realized partially offset by the expiration of state tax credits for which an allowance had been previously recorded.

As of

September 28, 2019,

we had

material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.

We classify interest and penalties related to unrecognized tax benefits as part of income tax expense. There were

interest and penalties related to unrecognized tax benefits incurred during

2019,

2018

and

2017.

We file U.S. federal income tax returns as well as state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to

2014

remain subject to examination.