Income Tax Provision. The components of net income before income taxes are as follows (in thousands):

	2020		2019		2018
Domestic	$	77,721	$	93,510	$	80,234
India		6,245		4,769		2,173
Foreign Other		1,390		7,444		4,580
Total	$	85,356	$	105,723	$	86,987

		2020			2019			2018
Current:
Federal	$	17,760		$	16,616		$	7,814
State		5,373			2,910			4,589
India		1,788			1,004			757
Foreign Other		2,990			2,515			2,784
		27,911			23,045			15,944
Deferred:
Federal		(497	)		(1,943	)		4,584
State		(1,031	)		624			(619	)
India		(387	)		36			(152	)
Foreign Other		649			1,191			1,100
		(1,266	)		(92	)		4,913
Total income tax provision	$	26,645		$	22,953		$	20,857

The effective tax rate in India of 22.4%, 21.8% and 27.8% in 2020, 2019 and 2018 respectively, differs from the statutory rate of approximately 29% due primarily to certain operations occurring within a Special Economic Zone (“SEZ”). Under the terms of SEZ, CSG qualifies for a reduced income tax rate on operations within the SEZ for a period of up to 10 years, beginning in 2018.

The difference between our income tax provision computed at the statutory Federal income tax rate and our financial statement income tax is summarized as follows (in thousands):

	2020			2019			2018
Provision at Federal rate of 21%	$	17,925		$	22,202		$	18,267
State income taxes, net of Federal impact		3,430			2,792			2,985
Research and experimentation credits		(2,705	)		(3,314	)		(4,040	)
Stock award vesting		(540	)		(3,661	)		(1,513	)
Tax uncertainties		(403	)		(56	)		(122	)
Section 199 manufacturing deduction		—			—			168
Section 162(m) compensation limitation		4,494			978			951
Foreign rate differential		462			930			1,238
Valuation allowance for deferred tax assets		1,002			(495	)		(177	)
Withholding Tax		2,572			2,408			2,070
Other impact of foreign operations		621			227			685
Statutory rate change		71			(10	)		(87	)
Other		(284	)		952			432
Total income tax provision	$	26,645		$	22,953		$	20,857

We have undistributed earnings of approximately $52 million from certain foreign subsidiaries. We intend to indefinitely reinvest these foreign earnings, therefore, a provision has not been made for foreign withholding taxes that might be payable upon remittance of such earnings. Determination of the amount of unrecognized deferred tax liability on unremitted foreign earnings is not practicable because of the complexities of the hypothetical calculation.

Deferred Income Taxes. Net deferred income tax assets as of December 31, 2020 and 2019 are as follows (in thousands):

	2020			2019
Deferred income tax assets	$	59,895		$	71,343
Deferred income tax liabilities		(33,099	)		(48,411	)
Valuation allowance		(21,700	)		(19,916	)
Net deferred income tax assets	$	5,096		$	3,016

The components of our net deferred income tax assets (liabilities) as of December 31, 2020 and 2019 are as follows (in thousands):

	2020			2019
Net deferred income tax assets:
Accrued expenses and reserves	$	12,587		$	8,810
Stock-based compensation		3,285			4,844
Software		(1,532	)		(1,556	)
Client contracts and related intangibles		(5,199	)		(7,771	)
Goodwill		(9,109	)		(7,431	)
Net operating loss carryforwards		26,893			25,989
Property and equipment		(8,816	)		(4,410	)
Deferred revenue		4,020			1,307
State Taxes		1,804			1,387
Contingent payments		(1,017	)		(1,710	)
Foreign exchange gain/loss		1,406			1,340
Operating lease right-of-use assets and lease liabilities		1,962			1,611
Other		512			522
Total deferred income tax assets		26,796			22,932
Less: valuation allowance		(21,700	)	$	(19,916	)
Net deferred income tax assets	$	5,096		$	3,016

We regularly assess the likelihood of the future realization of our deferred income tax assets. To the extent we believe that it is more likely than not that a deferred income tax asset will not be realized, a valuation allowance is established. As of December 31, 2020, we believe we will generate sufficient taxable income in the future such that we will realize 100% of the benefit of our U.S. Federal deferred income tax assets, thus no valuation allowance has been established. As of December 31, 2020, we have deferred income tax assets net of federal benefit related to state and foreign income tax jurisdictions of $4.0 million and $29.7 million, respectively, and have established valuation allowances against those state and foreign income tax deferred income tax assets of $2.1 million and $19.6 million, respectively.

As of December 31, 2020 and 2019, we have an acquired U.S. Federal net operating loss (“NOL”) carryforward of approximately $24 million and $29 million, respectively, which will begin to expire in 2024 and can be utilized through 2030. The acquired U.S. Federal NOL carryforward is attributable to the pre-acquisition periods of acquired businesses. The annual utilization of this U.S. Federal NOL carryforward is limited pursuant to Section 382 of the Internal Revenue Code of 1986, as amended. In addition, as of December 31, 2020 and 2019, we have: (i) state NOL carryforwards of approximately $49 million and $51 million, respectively, which will expire beginning in 2021 and end in 2045; and (ii) foreign subsidiary NOL carryforwards of approximately $107 million and $96 million, respectively, which will expire beginning in 2034, with a portion of the losses available over an indefinite period of time.

Accounting for Uncertainty in Income Taxes. We are required to estimate our income tax liability in each jurisdiction in which we operate, including U.S. Federal, state, and foreign income tax jurisdictions. Various judgments and estimates are required in evaluating our tax positions and determining our provisions for income taxes. There are certain transactions and calculations for which the ultimate income tax determination may be uncertain. In addition, we may be subject to examination of our income tax returns by various foreign, federal, state, or local tax authorities, which could result in adverse outcomes. For these reasons, we establish a liability associated with unrecognized tax benefits based on estimates of whether additional taxes and interest may be due. This liability is adjusted based upon changing facts and circumstances, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate.

A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands):

	2020			2019			2018
Balance, beginning of year	$	1,540		$	1,668		$	1,915
Purchase accounting adjustment related to acquisitions		160			—			—
Lapse of statute of limitations		(313	)		(420	)		(226	)
Additions for tax positions of prior years		111			322			85
Reductions for tax positions of prior years		(105	)		(30	)		(106	)
Balance, end of year	$	1,393		$	1,540		$	1,668

We recognize interest and penalty expense associated with our liability for unrecognized tax benefits as a component of income tax expense in our Income Statements. In addition to the $1.4 million, $1.5 million, and $1.7 million of liability for unrecognized tax benefits as of December 31, 2020, 2019, and 2018, we had $0.6 million, for each period, of income tax-related accrued interest, net of any federal benefit of deduction. If recognized, the $1.4 million of unrecognized tax benefits as of December 31, 2020, would favorably impact our effective tax rate in future periods.

We file income tax returns in the U.S. Federal jurisdiction, various U.S. state and local jurisdictions, and many foreign jurisdictions. The U.S., U.K., India, and Australia are the primary taxing jurisdictions in which we operate. The years open for audit vary depending on the taxing jurisdiction. We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $0.3 million over the next twelve months due to completion of audits and the expiration of statute of limitations.