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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
The provision for income taxes from operations consisted of the following: 
 Years Ended December 31,
(in thousands)
202120202019
Current
Federal$65,861 $42,337 $28,314 
State19,515 12,571 7,465 
Foreign7,641 4,478 6,039 
Deferred0
Federal802 2,330 3,329 
State(169)598 805 
Foreign(1,548)250 (1,577)
$92,102 $62,564 $44,375 
 
Income and loss from operations before income taxes for the years ended December 31, 2021, 2020, and 2019, respectively, consisted of the following:
 Years Ended December 31,
 (in thousands) 
202120202019
Domestic$336,085 $238,320 $163,257 
Foreign22,464 11,244 15,100 
$358,549 $249,564 $178,357 

At December 31, 2021, the Company had $41.4 million of pre-tax loss carryforwards in various foreign taxing jurisdictions. All of the tax losses can be carried forward indefinitely.

At December 31, 2021, and 2020, the Company has valuation allowances of $12.0 million and $11.3 million, respectively. The valuation allowance increased $0.7 million and decreased $0.3 million for the years ended December 31, 2021, and December 31, 2020, respectively. The increase in the 2021 valuation allowances was primarily the result of an impairment on a foreign equity investment. The decrease in the 2020 valuation allowances was primarily a result of the release of valuation allowance for foreign losses in Simpson Strong-Tie A/S, a subsidiary in Denmark.

As of December 31, 2021, the Company asserts that its accumulated undistributed earnings generated by our foreign subsidiaries are permanently reinvested and as such, has not recognized a US deferred tax liability on its investment in foreign subsidiaries. The Company will continue to assess its permanent reinvestment assertion on a quarterly basis.

Reconciliations between the statutory federal income tax rates and the Company’s effective income tax rates as a percentage of income before income taxes for its operations were as follows:
 Years Ended December 31,
 (in thousands) 
202120202019
Federal tax rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit4.3 %4.2 %3.6 %
Change in valuation allowance— %0.1 %(0.1)%
True-up of prior year tax returns to tax provision(0.1)%(0.4)%(0.3)%
Difference between U.S. statutory and foreign local tax rates0.4 %0.4 %0.8 %
Change in uncertain tax position— %— %0.1 %
Other0.1 %(0.2)%(0.2)%
Effective income tax rate25.7 %25.1 %24.9 %
The tax effects of the significant temporary differences that constitute the deferred tax assets and liabilities at December 31, 2021 and 2020, respectively, were as follows:
 December 31,
 (in thousands)
20212020
Deferred asset taxes
State tax$1,490 $1,076 
Workers’ compensation892 883 
Health claims1,351 1,207 
Vacation liability376 374 
Allowance for doubtful accounts344 384 
Inventories7,497 6,108 
Sales incentive and advertising allowances1,777 1,086 
Lease obligations11,562 11,631 
Stock-based compensation2,612 2,148 
Unrealized foreign exchange gain or loss378 344 
Foreign tax credit carryforwards4,983 4,744 
Uncertain tax positions’ unrecognized tax benefits72 77 
Non-United States tax loss carry forward7,824 7,717 
Other940 — 
$42,098 $37,779 
  Less valuation allowances(11,992)(11,316)
  Total deferred asset taxes$30,106 $26,463 
Deferred tax liabilities
Depreciation$(14,999)$(12,933)
Goodwill and other intangibles amortization(16,682)(15,642)
Tax effect on cumulative translation adjustment(504)(568)
Right of use assets(11,453)(11,489)
Other— (247)
Total deferred tax liabilities(43,638)(40,879)
Total Deferred tax asset/(liability)$(13,532)$(14,416)

A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2021, 2020 and 2019, respectively, were as follows, including foreign translation amounts:
Reconciliation of Unrecognized Tax Benefits202120202019
Balance at January 1$1,168 $1,706 $1,757 
Additions based on tax positions related to prior years9 78 8 
Reductions based on tax positions related to prior years(47)(7)(30)
Additions for tax positions of the current year3 48 167 
Lapse of statute of limitations(189)(657)(196)
Balance at December 31$944 $1,168 $1,706 
 
Tax positions of $0.3, $0.3, and $0.2 million are included in the balance of unrecognized tax benefits at December 31, 2021, 2020, and 2019, respectively, which if recognized, would reduce the effective tax rate.

The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense in accordance with the Company’s historical accounting policy. During the year ended December 31, 2021, 2020 and 2019, accrued interest decreased by $39 thousand and $108 thousand and $20 thousand, respectively. The Company had accrued $0.2 million for fiscal year ended 2021, $0.3 million for fiscal year ended 2020 and $0.4 million for fiscal year ended 2019, for the potential payment of interest before income tax benefits. The Company does not expect any material changes in unrecognized tax benefits within the next 12 months.
 
At December 31, 2021, the Company remained subject to federal income tax examinations in the U.S. for the tax years 2018 through 2021. In addition, tax years 2016 through 2021 remain open to examination in states, local and foreign jurisdictions.