Income taxes	3 Months Ended
May 03, 2013
Income taxes
Income taxes	3. Income taxes Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. Income tax reserves are determined using the methodology established by accounting standards for income taxes which require companies to assess each income tax position taken using a two-step approach. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. The Internal Revenue Service (“IRS”) has previously examined the Company’s 2008 and earlier federal income tax returns. As a result, the 2008 and earlier tax years are not open for further examination by the IRS. The IRS, at its discretion, may choose to examine the Company’s 2009, 2010, or 2011 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, the Company’s 2009 and later tax years remain open for examination by the various state taxing authorities. As of May 3, 2013, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $24.7 million, $2.6 million and $0.4 million, respectively, for a total of $27.7 million. Of this amount, $2.0 million and $25.7 million are reflected in current liabilities as Accrued expenses and other and in noncurrent Other liabilities, respectively, in the condensed consolidated balance sheet. The Company believes it is reasonably possible that the reserve for uncertain tax positions may be reduced by approximately $9.9 million in the coming twelve months principally as a result of the expiration of the statute of limitations. As of May 3, 2013, approximately $24.7 million of the reserve for uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions. The effective income tax rate for the 13-week period ended May 3, 2013 was 37.4% compared to a rate of 38.2% for the 13-week period ended May 4, 2012. The Company receives a significant income tax benefit related to salaries paid to certain newly hired employees that qualify for federal jobs credits (principally the Work Opportunity Tax Credit or “WOTC”). The federal law authorizing the WOTC credit was not in effect during the 13-week period ended May 4, 2012 but was retroactively re-enacted later in the Company’s 2012 fiscal year and currently applies to eligible employees hired on or before December 31, 2013. The availability of these credits in the 2013 period is the principal reason for the decrease in the 2013 effective income tax rate as compared to the 2012 period when the credits were generally not available. Whether these credits will be available for employees hired after December 31, 2013 depends upon a change in the tax law that extends the expiration date of this credit provision, the certainty and timing of which are currently unclear.

3. Income taxes

Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns.

Income tax reserves are determined using the methodology established by accounting standards for income taxes which require companies to assess each income tax position taken using a two-step approach. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position.

The Internal Revenue Service (“IRS”) has previously examined the Company’s 2008 and earlier federal income tax returns. As a result, the 2008 and earlier tax years are not open for further examination by the IRS. The IRS, at its discretion, may choose to examine the Company’s 2009, 2010, or 2011 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, the Company’s 2009 and later tax years remain open for examination by the various state taxing authorities.

As of May 3, 2013, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $24.7 million, $2.6 million and $0.4 million, respectively, for a total of $27.7 million. Of this amount, $2.0 million and $25.7 million are reflected in current liabilities as Accrued expenses and other and in noncurrent Other liabilities, respectively, in the condensed consolidated balance sheet.

The Company believes it is reasonably possible that the reserve for uncertain tax positions may be reduced by approximately $9.9 million in the coming twelve months principally as a result of the expiration of the statute of limitations. As of May 3, 2013, approximately $24.7 million of the reserve for uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions.

The effective income tax rate for the 13-week period ended May 3, 2013 was 37.4% compared to a rate of 38.2% for the 13-week period ended May 4, 2012. The Company receives a significant income tax benefit related to salaries paid to certain newly hired employees that qualify for federal jobs credits (principally the Work Opportunity Tax Credit or “WOTC”). The federal law authorizing the WOTC credit was not in effect during the 13-week period ended May 4, 2012 but was retroactively re-enacted later in the Company’s 2012 fiscal year and currently applies to eligible employees hired on or before December 31, 2013. The availability of these credits in the 2013 period is the principal reason for the decrease in the 2013 effective income tax rate as compared to the 2012 period when the credits were generally not available. Whether these credits will be available for employees hired after December 31, 2013 depends upon a change in the tax law that extends the expiration date of this credit provision, the certainty and timing of which are currently unclear.