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INCOME TAXES
 12 Months Ended
Dec. 26, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes is comprised of the following:
(in thousands)202120202019
Current taxes:
Federal$4,925 $(7,318)$(933)
State4,067 (382)3,835 
Foreign2,393 3,045 2,806 
Total current taxes11,385 (4,655)5,708 
Deferred taxes:
Federal617 (22,416)846 
State88 (3,369)1,216 
Foreign126 (981)(799)
Total deferred taxes831 (26,766)1,263 
Provision for income taxes$12,216 $(31,421)$6,971 
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 (Loss) are as follows:
(in thousands, except percentages)2021%2020%2019%
Income tax expense (benefit) based on statutory rate$15,508 21.0 %$(36,385)21.0 %$14,709 21.0 %
Increase (decrease) resulting from:
State income taxes, net of federal benefit3,548 4.8 (6,631)3.8 3,666 5.3 
Hiring tax credits, net(7,582)(10.3)(7,719)4.5 (13,627)(19.4)
CARES Act(468)(0.6)(2,939)1.7 — — 
Non-deductible goodwill impairment charge— — 21,849 (12.6)— — 
Non-deductible/non-taxable items589 0.8 124 (0.1)1,559 2.2 
Foreign taxes211 0.3 (977)0.5 282 0.4 
Other, net410 0.5 1,257 (0.7)382 0.5 
Total tax expense (benefit)$12,216 16.5 %$(31,421)18.1 %$6,971 10.0 %
Our effective tax rate for fiscal 2021 was 16.5%. The difference between the statutory federal income tax rate of 21.0% and our effective income tax rate results primarily from WOTC. Other differences result from state and foreign income tax, certain non-taxable income and non-deductible expenses, CARES Act and tax effects of stock-based compensation.
The non-deductible goodwill and intangible asset impairment charge relates to an impairment charge of the carrying amounts of goodwill and other intangible assets of $175.2 million, recorded in the first quarter of 2020. Of the total impairment loss, $84.7 million (tax-effect $21.8 million) related to reporting units from stock acquisitions and accordingly were not deductible for tax purposes. The remaining impairment loss of $90.5 million (tax-effect $23.3 million) related to reporting units from asset acquisitions and accordingly were deductible for tax purposes.
U.S. and international components of income (loss) before tax expense (benefit) was as follows:
(in thousands)202120202019
U.S.$61,433 $(148,492)$61,610 
International12,417 (24,770)8,434 
Income (loss) before tax expense (benefit)$73,850 $(173,262)$70,044 
The components of deferred tax assets and liabilities were as follows:
(in thousands)December 26,
2021		December 27,
2020
Deferred tax assets:
Allowance for credit losses$1,750 $991 
Workers’ compensation1,653 — 
Accounts payable and other accrued expenses8,970 7,933 
Net operating loss carryforwards2,002 3,679 
Tax credit carryforwards11,920 18,461 
Accrued wages and benefits9,227 7,938 
Deferred compensation9,083 10,130 
Lease liabilities16,762 21,771 
Other137 1,047 
Total61,504 71,950 
Valuation allowance(2,368)(3,072)
Total deferred tax asset, net of valuation allowance59,136 68,878 
Deferred tax liabilities:
Prepaid expenses, deposits and other current assets(515)(1,840)
Lease right-of-use assets(13,638)(20,692)
Depreciation and amortization(15,653)(13,274)
Workers’ compensation— (3,053)
Total deferred tax liabilities(29,806)(38,859)
Deferred income taxes, net$29,330 $30,019 
Deferred taxes related to our foreign currency translation were immaterial for fiscal 2021, 2020 and 2019.
The activity related to the income tax valuation allowance was as follows:
(in thousands)202120202019
Beginning balance$3,072 $1,780 $2,079 
Charged to expense26 1,292 — 
Release of allowance(730)— (299)
Ending balance$2,368 $3,072 $1,780 
The following table summarizes our NOLs and credit carryforwards along with their respective valuation allowance as of December 26, 2021:
(in thousands)Carryover tax benefitValuation allowanceExpected
benefit		Year expiration begins
Year-end tax attributes:
Federal WOTCs$10,508 $— $10,508 2039
State NOLs2,002 (957)1,045 Various
California Enterprise Zone credits1,411 (1,411)— 2026
Foreign alternative minimum tax credits359 — 359 2032
Total$14,280 $(2,368)$11,912 
As of December 26, 2021, 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 fiscal year ended December 26, 2021. This liability is recorded in other long-term liabilities on our Consolidated Balance Sheets. In general, the tax years 2018 through 2020 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)202120202019
Beginning balance$1,930 $2,078 $2,190 
Increases for tax positions related to the current year188 218 318 
Decreases for tax positions related to prior years(52)— — 
Reductions due to lapsed statute of limitations(185)(366)(430)
Ending balance$1,881 $1,930 $2,078 
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 an immaterial amount for interest and penalties during fiscal 2021 and, in total, as of December 26, 2021, have recognized a liability for penalties of $0.1 million and interest of $0.6 million.