Income Taxes (Tables)

12 Months Ended

Dec. 29, 2020

Income Taxes

Schedule of provision for income taxes

The provision for income taxes consisted of the following (in thousands):

	Fiscal Year
	2020		2019		2018
(Loss)/Income before income taxes	$	(356,036)	$	140,334	$	107,411
Income tax (benefit)/provision:
Current:
Federal	$	(38,414)	$	8,211	$	5,082
State		2,971		7,027		8,804
Total current		(35,443)		15,238		13,886
Deferred:
Federal		(52,607)		(3,695)		(4,549)
State		(14,621)		1,498		(961)
Total deferred		(67,228)		(2,197)		(5,510)
Total (benefit)/provision	$	(102,671)	$	13,041	$	8,376

Schedule of reconciles the U.S. federal statutory rate to the effective tax rate

	Fiscal Year
	2020		2019		2018
U.S. federal statutory rate	21.0	%	21.0	%	21.0	%
State and district income taxes, net of federal benefit	2.6		4.9		6.1
Credit for FICA taxes paid on tips	2.1		(12.8)		(16.5)
Other credits and incentives	0.3		(1.4)		(2.5)
Impact of net operating loss carryback	3.4		—		—
Deferred compensation	0.6		(1.7)		0.8
Equity compensation	(0.4)		(0.2)		(1.5)
Other	(0.8)		(0.5)		0.4
Effective tax rate	28.8	%	9.3	%	7.8	%

Schedule of deferred tax assets and liabilities

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

	December 29, 2020		December 31, 2019
Deferred tax assets:
Staff member benefits	$	33,419	$	27,059
Insurance reserves		11,460		14,157
Operating lease liability		319,274		311,043
Deferred income		31,119		22,725
Tax credit carryforwards		37,107		15,754
Goodwill		15,632		—
Stock-based compensation		9,937		8,794
State and foreign net operating loss carryforwards		3,536		—
Derivative asset		1,409		—
Other		1,466		1,958
Subtotal		464,359		401,490
Less: Valuation allowance		(1,041)		(713)
Total	$	463,318	$	400,777
Deferred tax liabilities:
Property and equipment	$	(124,634)	$	(133,206)
Prepaid expenses		(7,027)		(8,819)
Inventory		(7,766)		(7,713)
Accrued rent		(4,947)		(4,955)
Operating lease asset		(280,845)		(276,420)
Other		(214)		(136)
Total	$	(425,433)	$	(431,249)
Net deferred tax asset/(liability)	$	37,885	$	(30,472)

Schedule of reconciliation of our uncertain tax positions

	Fiscal Year
	2020		2019		2018
Balance at beginning of year	$	704	$	830	$	843
Additions related to current period tax positions		(49)		13		104
Reductions related to settlements with taxing authorities and lapses of statutes of limitations		—		(139)		(117)
Balance at end of year	$	655	$	704	$	830