(1)

The Tax Act, which was enacted on December 22, 2017, made significant changes to how corporations are taxed in the U.S., the most prominent of which affecting us was to lower the U.S. corporate tax rate from 35% to 21%. In addition to the benefit of a lower rate in future years, the enactment of the Tax Act caused us to revalue our deferred tax assets and liabilities to reflect the new rate, resulting in a benefit to our fiscal 2017 income tax provision of $38.5 million.

The following reconciles the U.S. federal statutory rate to the effective tax rate:


	Fiscal Year
	2019		2018		2017

U.S. federal statutory rate	21.0	%	21.0	%	35.0	%
State and district income taxes, net of federal benefit	4.9		6.1		3.3
Credit for FICA taxes paid on tips	(12.8)		(16.5)		(9.4)
Other credits and incentives	(1.4)		(2.5)		(1.9)
Manufacturing deduction	—		—		(2.3)
Deferred compensation	(1.7)		0.8		(1.5)
Equity compensation	(0.2)		(1.5)		(4.5)
Impact of statutory rate change on deferred taxes	—		—		(26.3)
Other	(0.5)		0.4		0.1
Effective tax rate	9.3	%	7.8	%	(7.5)	%

Following are the temporary differences that created our deferred tax assets and liabilities (in thousands):


	December 31, 2019		January 1, 2019
Deferred tax assets:
Staff member benefits	$	27,059	$	22,925
Insurance reserves		14,157		15,165
Accrued rent		27,582		10,870
Deferred income		22,725		17,288
Stock-based compensation		8,794		8,628
Tax credit carryforwards		15,754		1,880
Other		1,958		1,265
Subtotal		118,029		78,021
Less: Valuation allowance		(713)		(792)
Total	$	117,316	$	77,229

Deferred tax liabilities:
Property and equipment	$	(131,120)	$	(107,513)
Prepaid expenses		(8,819)		(7,929)
Inventory		(7,713)		(6,893)
Other		(136)		(5,420)
Total	$	(147,788)	$	(127,755)

Net deferred tax liability	$	(30,472)	$	(50,526)

At December 31, 2019 and January 1, 2019, we had $1.9 million and $2.4 million, respectively, of state tax credit carryforwards, consisting of hiring and investment credits, which began to expire in 2013, and $0.8 million and $0.7 million, respectively, of foreign net operating losses and $14.3 million and $3.3 million, respectively, of federal credit carryforwards which begin to expire in 2038. We assess the available evidence to estimate if sufficient future taxable income will be generated to use these carryforwards. Based on this evaluation, we recorded a valuation allowance of $0.7 million and $0.8 million at December 31, 2019 and January 1, 2019, respectively, to reflect the amount that we will likely not realize. This assessment could change if estimates of future taxable income during the carryforward period are revised. The earliest tax year still subject to examination by a significant taxing jurisdiction is 2010.

At December 31, 2019, we had a reserve of $0.7 million for uncertain tax positions. If recognized, this amount would impact our effective income tax rate. A reconciliation of the beginning and ending amount of our uncertain tax positions is as follows (in thousands):


	Fiscal Year
	2019		2018		2017

Balance at beginning of year	$	830	$	843	$	829
Additions related to current period tax positions		13		104		168
Reductions related to settlements with taxing authorities and lapses of statutes of limitations		(139)		(117)		(154)
Balance at end of year	$	704	$	830	$	843

At both December 31, 2019 and January 1, 2019, we had $0.2 million of accrued interest and penalties related to uncertain tax positions. None of the balance of uncertain tax positions at December 31, 2019 relates to tax positions for which it is reasonably possible that the total amount could decrease during the next twelve months based on the lapses of statutes of limitations.