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Income Taxes
 6 Months Ended
Jul. 02, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's effective tax rates for each of the three and six months ended July 2, 2023 and July 3, 2022 differ from its 21% statutory tax rates due to state income taxes, permanent tax differences, the tax impact of the vesting of restricted stock units and changes in the deferred tax asset valuation allowance. The effective tax rate in any quarter can be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution. The effective income tax rate for the three months ended July 2, 2023 and July 3, 2022 was (0.4)% and (0.5)%, respectively, and the effective income tax rate for the six months ended July 2, 2023 and July 3, 2022 was (0.2)% and 0.5% respectively.
Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this analysis, a valuation allowance of $20,734 and $19,855 was recorded as of July 2, 2023 and January 1, 2023, respectively, to reduce the net deferred tax assets to the amount that is more likely than not to be realized.
No liability has been recorded for uncertain tax positions. If applicable, the Company would accrue income tax related interest and penalties in income tax expense in its condensed consolidated statement of operations. There were no interest or penalties incurred during the three and six months ended July 2, 2023 and July 3, 2022.
In August 2022, the U.S. enacted the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the "CHIPS Act"). The CHIPS Act provides incentives to semiconductor chip manufacturers in the United States, including providing a 25% manufacturing investment credit for investments in semiconductor manufacturing property placed in service after December 31, 2022, for which construction begins before January 1, 2027. Property investments qualify for the 25% credit if, among other requirements, the property is integral to the operation of an advanced manufacturing facility, defined as having a primary purpose of manufacturing semiconductors or semiconductor manufacturing equipment. Currently, management is evaluating the impact of the CHIPS Act on its business.