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INCOME TAXES (Note)
 12 Months Ended
Dec. 27, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes is comprised of the following:
(in thousands)202020192018
Current taxes:
Federal$(7,318)$(933)$5,088 
State(382)3,835 5,208 
Foreign3,045 2,806 1,542 
Total current taxes(4,655)5,708 11,838 
Deferred taxes:
Federal(22,416)846 (1,283)
State(3,369)1,216 120 
Foreign(981)(799)(766)
Total deferred taxes(26,766)1,263 (1,929)
Provision for income taxes$(31,421)$6,971 $9,909 
The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income are as follows:
(in thousands, except percentages)2020%2019%2018%
Income tax expense (benefit) based on statutory rate$(36,385)21.0 %$14,709 21.0 %$15,889 21.0 %
Increase (decrease) resulting from:
State income taxes, net of federal benefit(6,631)3.8 3,666 5.3 3,826 5.1 
Job and other tax credits, net(7,719)4.5 (13,627)(19.4)(12,303)(16.3)
Benefit from the CARES Act(2,939)1.7 — — — — 
Non-deductible goodwill impairment charge21,849 (12.6)— — — — 
Non-deductible/non-taxable items124 (0.1)1,559 2.2 1,191 1.6 
Foreign taxes(977)0.5 282 0.4 735 1.0 
Other, net1,257 (0.7)382 0.5 571 0.7 
Total tax expense (benefit)$(31,421)18.1 %$6,971 10.0 %$9,909 13.1 %
Our effective tax rate for fiscal 2020 was 18.1%. The difference between the statutory federal income tax rate of 21.0% and our effective income tax rate results primarily from a nondeductible goodwill and intangible asset impairment charge, the impact of the CARES Act and the federal WOTC. Other differences result from state and foreign income taxes, certain non-deductible expenses, tax exempt interest, and tax effects of stock-based compensation.
The non-cash impairment charge of $175.2 million, recorded in the first quarter of 2020, includes $84.7 million (tax effect of $21.8 million) related to reporting units from stock acquisitions and accordingly are not deductible for tax purposes. The remaining impairment charges of $90.5 million (tax effect of $23.3 million) related to reporting units from asset acquisitions and accordingly are deductible for tax purposes.
U.S. and international components of income before tax expense was as follows:
(in thousands)202020192018
U.S.$(148,492)$61,610 $73,051 
International(24,770)8,434 2,612 
Income (loss) before tax expense (benefit)$(173,262)$70,044 $75,663 
The components of deferred tax assets and liabilities were as follows:
(in thousands)December 27,
2020		December 29,
2019
Deferred tax assets:
Allowance for doubtful accounts$991 $973 
Workers’ compensation— 817 
Accounts payable and other accrued expenses7,933 3,818 
Net operating loss carryforwards3,679 2,085 
Tax credit carryforwards18,461 9,528 
Accrued wages and benefits7,938 5,148 
Deferred compensation10,130 6,622 
Lease liabilities21,771 8,670 
Other1,047 969 
Total71,950 38,630 
Valuation allowance(3,072)(1,780)
Total deferred tax asset, net of valuation allowance68,878 36,850 
Deferred tax liabilities:
Prepaid expenses, deposits and other current assets(1,840)(1,282)
Lease right-of-use assets(20,692)(7,985)
Depreciation and amortization(13,274)(24,355)
Workers’ compensation(3,053)— 
Total deferred tax liabilities(38,859)(33,622)
Deferred income taxes, net$30,019 $3,228 
Deferred taxes related to our foreign currency translation were immaterial for fiscal 2020, 2019 and 2018.
The activity related to the income tax valuation allowance was as follows:
(in thousands)202020192018
Beginning balance$1,780 $2,079 $2,508 
Charged to expense1,292 — — 
Release of allowance— (299)(429)
Ending balance$3,072 $1,780 $2,079 
The following table summarizes our NOLs and credit carryforwards along with their respective valuation allowance as of December 27, 2020:
(in thousands)Carryover tax benefitValuation allowanceExpected
benefit		Year expiration begins
Year-end tax attributes:
Federal WOTCs$17,049 $— $17,049 2039
State NOLs2,949 (931)2,018 Various
Foreign NOLs730 (730)— Various
California Enterprise Zone credits1,411 (1,411)— 2023
Foreign alternative minimum tax credits1,103 — 1,103 2028
Total$23,242 $(3,072)$20,170 
As of December 27, 2020, our liability for unrecognized tax benefits was $1.9 million. If recognized, $1.5 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 27, 2020. This liability is recorded in other long-term liabilities on our Consolidated
Balance Sheets. In general, the tax years 2017 through 2019 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:
(in thousands)202020192018
Beginning balance$2,078 $2,190 $2,210 
Increases for tax positions related to the current year218 318 377 
Reductions due to lapsed statute of limitations(366)(430)(397)
Ending balance$1,930 $2,078 $2,190 
We recognize interest and penalties related to unrecognized tax benefits within income tax expense on the accompanying Consolidated Statements of Operations and Comprehensive Income. 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 an immaterial amount for interest and penalties during fiscal 2020 and, in total, as of December 27, 2020, have recognized a liability for penalties of $0.2 million and interest of $1.1 million.