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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Taxes |
Income Taxes | 8. Income Taxes Deferred tax attributes resulting from differences between the tax basis of assets and liabilities and the reported amounts in the consolidated balance sheet are as follows:
|  | December 31, |  | December 31, |
|  | 2020 |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |
Accruals and reserves |  | $ | 483 |  | $ | 383 |
Deferred rent credit |  |  | 175 |  |  | 139 |
Depreciation and amortization |  |  | 7 |  |  | — |
Total deferred tax assets |  |  | 665 |  |  | 522 |
Deferred tax liabilities: |  |  |  |  |  |  |
Accruals and reserves |  |  | (9) |  |  | — |
Depreciation and amortization |  |  | (2,010) |  |  | (266) |
Total deferred tax liabilities |  |  | (2,019) |  |  | (266) |
Net deferred tax (liabilities) asset |  | $ | (1,354) |  | $ | 256 |
The provision for income taxes is as follows:
|  | Year ended December 31, |
|  | 2020 |  | 2019 |
Current: |  |  |  |  |  |  |
Federal |  | $ | 1,339 |  | $ | 1,740 |
State |  |  | 263 |  |  | 412 |
Foreign |  |  | 314 |  |  | 220 |
|  |  | 1,916 |  |  | 2,372 |
Deferred: |  |  |  |  |  |  |
Federal |  |  | (134) |  |  | (120) |
State |  |  | (28) |  |  | 9 |
Foreign |  |  | (8) |  |  | — |
|  |  | (170) |  |  | (111) |
|  | $ | 1,746 |  | $ | 2,261 |
Effective Tax Rate |  |  | 28.1 | % |  | 25.0 | %
The reasons for the difference between total tax expense and the amount computed by applying the U.S. statutory federal income tax rate to income before income taxes are as follows:
|  | Year ended December 31, |
|  | 2020 |  | 2019 |
Statutory rate applied to pretax income |  | $ | 1,309 |  | $ | 1,900 |
Acquisition related costs |  |  | 319 |  |  | — |
Stock compensation |  |  | (59) |  |  | — |
Dividends |  |  | (19) |  |  | — |
Other permanent items |  |  | 19 |  |  | 27 |
State income taxes, net of federal income tax benefit |  |  | 182 |  |  | 269 |
Foreign income taxes over U.S. statutory rate |  |  | (1) |  |  | 28 |
Other items |  |  | (4) |  |  | 37 |
Income tax expense |  | $ | 1,746 |  | $ | 2,261 |
The Company has analyzed filing positions in all the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal consolidated tax return, its state tax return in New Jersey, its Canadian tax return and its tax return in the United Kingdom as major tax jurisdictions. As of December 31, 2020, the Company’s 2017 through 2019 Federal tax returns remain open for examination. The Company’s New Jersey and Canadian tax returns are open for examination for the years 2016 through 2019. The Company’s tax return in the United Kingdom is open for examination for the years 2019 and 2020. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including experience and interpretations of tax law applied to the facts of each matter. For financial reporting purposes, income before income taxes includes the following components:
|  | Year ended December 31, |
|  | 2020 |  | 2019 |
United States |  | $ | 4,767 |  | $ | 8,155 |
Foreign |  |  | 1,453 |  |  | 893 |
|  | $ | 6,220 |  | $ | 9,048 |
The Company has approximately $6.7 million of undistributed earnings in Canada, which it continues to reinvest indefinitely, and therefore no withholding taxes related to its repatriation has been recorded. The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31, 2020 and 2019:
|  | 2020 |  | 2019
Balance as of January 1 |  | $ | 49 |  | $ | 541
Additions related to prior period tax positions |  |  | - |  |  | -
Reductions related to settlements with tax authorities |  |  | (49) |  |  | (492)
Balance as of December 31 |  | $ | - |  | $ | 49
During the years ended December 31, 2020 and 2019, the Company incurred interest and penalties of less than $0.1 million, respectively, related to these uncertain tax benefits.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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