10. Income Taxes
The current and deferred federal and state income tax provision from continuing operations, are comprised of the following:
| December 31, | |||||||
| 2017 | 2016 | 2015 | |||||
| (Amounts in Thousands) | |||||||
| Current | |||||||
| Federal | $ | 5,782 | $ | 4,400 | $ | 2,743 | |
| State | 1,069 | 908 | 528 | ||||
| Deferred | |||||||
| Federal | 1,672 | (1,147 | ) | 546 | |||
| State | 66 | (167 | ) | 115 | |||
| Provision for income taxes | $ | 8,589 | $ | 3,994 | $ | 3,932 | |
The tax effects of certain temporary differences between the Company's book and tax bases of assets and liabilities give rise to significant portions of the deferred income tax assets at December 31, 2017 and 2016. The deferred tax assets consisted of the following:
| December 31, | ||||||
| 2017 | 2016 | |||||
| (Amounts in | ||||||
| Thousands) | ||||||
| Deferred tax assets | ||||||
| Long-term | ||||||
| Accounts receivable allowances | $ | 2,917 | $ | 2,960 | ||
| Accrued compensation | 1,919 | 2,733 | ||||
| Accrued workers' compensation | 3,274 | 4,854 | ||||
| Transaction costs | 898 | 1,137 | ||||
| Reserves | 47 | 169 | ||||
| Restructuring costs | 293 | 718 | ||||
| Stock-based compensation | 811 | 799 | ||||
| Other | 138 | 524 | ||||
| Total long-term deferred tax assets | 10,297 | 13,894 | ||||
| Deferred tax liabilities | ||||||
| Long-term | ||||||
| Goodwill and intangible assets | (7,301 | ) | (9,506 | ) | ||
| Property and equipment | (749 | ) | (552 | ) | ||
| Prepaid insurance | (359 | ) | (478 | ) | ||
| Other | (1 | ) | (3 | ) | ||
| Total long-term deferred tax liabilities | (8,410 | ) | (10,539 | ) | ||
| Valuation allowance | (286 | ) | — | |||
| Total net deferred tax assets | $ | 1,601 | $ | 3,355 | ||
Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income in making this assessment.
A reconciliation for continuing operation of the statutory federal tax rate of 35.0%, 35.0% and 34.5% and to the effective income tax rate, for the years ended December 31, 2017, 2016, and 2015, is summarized as follows:
| December 31, | ||||||
| 2017 | 2016 | 2015 | ||||
| Federal income tax at statutory rate | 35.0 | % | 35.0 | % | 34.5 | % |
| State and local taxes, net of federal benefit | 5.1 | 5.2 | 5.2 | |||
| Jobs tax credits, net | (6.1 | ) | (15.8 | ) | (11.1 | ) |
| Nondeductible permanent items | 0.4 | 0.9 | 0.5 | |||
| 2017 Tax Reform Act, deferred tax assets rate changes | 5.3 | — | — | |||
| Other | (0.7 | ) | (0.2 | ) | (3.4 | ) |
| Effective income tax rate | 39.0 | % | 25.1 | % | 25.7 | % |
In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, "Income Tax Accounting Implications of the Tax Cuts and Job Act," ("SAB 118") to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. Additional work is necessary for a more detailed analysis of our deferred tax assets and liabilities as well as potential correlative adjustments. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.
The Company is subject to taxation in the jurisdictions in which it operates. The Company continues to remain subject to examination by U.S. federal authorities for the years 2014 through 2017 and for various state authorities for the years 2013 through 2017.
At December 31, 2017 and 2016, the Company did not have any unrecognized tax benefits under ASC Topic 740.