NOTE 15 — Income Taxes

The effective tax rates for 2015 and 2014 are as follows:


	Three Months Ended				Six Months Ended
	June 28, 2015		June 29, 2014		June 28, 2015		June 29, 2014
Effective tax rate	(75.7)	%	34.0	%	(27.7)	%	38.7	%

The 2015 effective tax rate for the three months ended June 28, 2015 reflects two significant discrete items. First, there was an increase in the effective rate of 45.7 percentage points due to a reserve on an uncertain tax position. Second, there was a decrease in the effective rate of 145.5 percentage points due to CTS’ intent to file amended tax returns for years ended 2006 to 2013, in which the treatment of foreign taxes will be changed from deductions to credits. For the six months ended June 28, 2015, the effect of the uncertain tax benefits increased the effective tax rate by 25.0 percentage points and the effect of amending the tax returns for 2006 to 2013 decreased the effective rate by 79.5 percentage points.

The 2014 effective tax rate reflected the effect of a tax adjustment that decreased the effective rate by 2.6 percentage points in the second quarter of 2014 and increased the effective rate by 2.7 percentage points in the first six months of 2014.

CTS’ continuing practice is to recognize interest and/or penalties related to income tax matters as income tax expense. For the three and six months ended June 28, 2015 CTS accrued approximately $820,000 of potential interest into income tax expense related to a foreign tax item. For the three and six months ended June 29, 2014, CTS did not accrue any interest or penalties into income tax expense.