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INCOME TAXES | 12 Months Ended
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Jan. 01, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The provision for income taxes is comprised of the following:
| Years ended
(in thousands) | 2017 | 2016 | 2015
Current taxes: |  |  |
Federal | $ | 12,134 |  | $ | 12,082 |  | $ | 12,665 |
State | 3,979 |  | 5,448 |  | 5,611 |
Foreign | 3,545 |  | 2,677 |  | 1,882 |
Total current taxes | 19,658 |  | 20,207 |  | 20,158 |
Deferred taxes: |  |  |
Federal | 3,645 |  | (20,693 | ) | 4,963 |
State | (195 | ) | (4,064 | ) | 81 |
Foreign | (1,014 | ) | (539 | ) | (2 | )
Total deferred taxes | 2,436 |  | (25,296 | ) | 5,042 |
Provision for income taxes | $ | 22,094 |  | $ | (5,089 | ) | $ | 25,200 |
The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows:
| Years ended
(in thousands, except percentages) | 2017 | % | 2016 | % | 2015 | %
Income tax expense (benefit) based on statutory rate | $ | 27,140 |  | 35.0 | % | $ | (7,119 | ) | 35.0 | % | $ | 33,745 |  | 35.0 | %
Increase (decrease) resulting from: |  |  |  |  |  |
State income taxes, net of federal benefit | 2,667 |  | 3.4 | % | 1,373 |  | (6.8 | )% | 4,175 |  | 4.3 | %
Tax credits, net | (9,964 | ) | (12.9 | )% | (17,141 | ) | 84.3 | % | (14,483 | ) | (15.0 | )%
Transition to the U.S. Tax Cuts and Job Act | 2,466 |  | 3.2 | % | — |  | — | % | — |  | — | %
Non-deductible goodwill impairment charge | — |  | — | % | 17,694 |  | (87.0 | )% | — |  | — | %
Non-deductible/non-taxable items | 1,157 |  | 1.5 | % | 630 |  | (3.1 | )% | 2,456 |  | 2.5 | %
Foreign taxes | (342 | ) | (0.4 | )% | 993 |  | (4.8 | )% | (933 | ) | (1.0 | )%
Other, net | (1,030 | ) | (1.3 | )% | (1,519 | ) | 7.4 | % | 240 |  | 0.3 | %
Total taxes on income (loss) | $ | 22,094 |  | 28.5 | % | $ | (5,089 | ) | 25.0 | % | $ | 25,200 |  | 26.1 | %
Our effective tax rate for fiscal 2017 was 28.5%. The difference between the statutory federal income tax rate of 35.0% and our effective income tax rate results primarily from the federal Work Opportunity Tax Credit (“WOTC”). This tax credit is designed to encourage employers to hire workers from certain targeted groups with higher than average unemployment rates. During fiscal 2017, we recognized $1.4 million of tax benefits from prior year WOTC. Other differences between the statutory federal income tax rate of 35.0% and our effective tax rate of 28.5% result from state and foreign income taxes, certain non-deductible expenses, tax exempt interest, and tax effects of share based compensation. Differences also result from the U.S. Tax Cuts and Job Act (the “Tax Act”) enacted December 22, 2017. As a result of the Tax Act, we recognized $2.5 million of additional tax expense from a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and from the revaluation of net deferred tax assets to reflect the federal tax rate reduction from 35.0% to 21.0%. Upon completion of our fiscal 2017 U.S. income tax return in 2018, we may identify adjustments to our recorded transition tax and remeasurement of our net deferred tax assets. We will continue to assess our provision for income taxes as future guidance is issued, but do not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. The components of deferred tax assets and liabilities were as follows:
(in thousands) | December 31, 2017 | January 1, 2017
Deferred tax assets: |  |
Allowance for doubtful accounts | $ | 876 |  | $ | 1,970 |
Workers’ compensation | 1,420 |  | — |
Accounts payable and other accrued expenses | 4,000 |  | 8,577 |
Net operating loss carryforwards | 2,388 |  | 2,287 |
Tax credit carryforwards | 1,615 |  | 2,835 |
Accrued wages and benefits | 4,644 |  | 9,470 |
Deferred compensation | 4,484 |  | 7,003 |
Other | 841 |  | 1,090 |
Total | 20,268 |  | 33,232 |
Valuation allowance | (2,508 | ) | (2,266 | )
Total deferred tax asset, net of valuation allowance | 17,760 |  | 30,966 |
Deferred tax liabilities: |  |
Prepaid expenses, deposits and other current assets | (2,096 | ) | (2,697 | )
Depreciation and amortization | (11,881 | ) | (18,330 | )
Workers’ compensation | — |  | (3,169 | )
Total deferred tax liabilities | (13,977 | ) | (24,196 | )
Net deferred tax (liabilities) asset, end of year | $ | 3,783 |  | $ | 6,770 |
Deferred taxes related to our foreign currency translation were de minimis for fiscal 2017, 2016 and 2015. The following table summarizes our net operating losses (“NOLs”) and credit carryforwards along with their respective valuation allowance as of December 31, 2017:
(in thousands) | Carryover tax benefit | Valuation allowance | Expected benefit | Year expiration begins
Year-end tax attributes: |  |  |  |
State NOLs | $ | 1,593 |  | $ | (349 | ) | $ | 1,244 |  | Various
Foreign NOLs | 795 |  | (795 | ) | — |  | Various
California Enterprise Zone credits (1) | 1,615 |  | (1,364 | ) | 251 |  | 2023
Total | $ | 4,003 |  | $ | (2,508 | ) | $ | 1,495 |  |
(1) | The California Enterprise Zone credits fully expire in 2023.
We have not provided for deferred income taxes relating to undistributed foreign earnings as we consider those earning to be permanently invested. Determination of the unrecognized deferred tax liability that would be incurred if such amounts were repatriated is not practicable. As of December 31, 2017, our liability for unrecognized tax benefits was $2.2 million. If recognized, $1.7 million would impact our effective tax rate. We do not believe the amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the year ended December 31, 2017. This liability is recorded in other non-current liabilities on our Consolidated Balance Sheets. In general, the tax years 2014 through 2016 remain open to examination by the major taxing jurisdictions where we conduct business. The following table summarizes the activity related to our unrecognized tax benefits:
| Years ended
(in thousands) | 2017 | 2016 | 2015
Balance, beginning of fiscal year | $ | 2,242 |  | $ | 2,195 |  | $ | 2,039 |
Increases for tax positions related to the current year | 356 |  | 348 |  | 436 |
Reductions due to lapsed statute of limitations | (388 | ) | (301 | ) | (280 | )
Balance, end of fiscal year | $ | 2,210 |  | $ | 2,242 |  | $ | 2,195 |
We recognize interest and penalties related to unrecognized tax benefits within income tax expense on the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Accrued interest and penalties are included within other long-term liabilities on the Consolidated Balance Sheets. Related to the unrecognized tax benefits noted above, we accrued a de minimis amount for interest and penalties during fiscal 2017 and, in total, as of December 31, 2017, have recognized a liability for penalties of $0.2 million and interest of $0.9 million.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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