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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
For financial reporting purposes, income from continuing operations before income taxes includes the following components (in thousands):
202220212020
United States$141,306 $92,847 $103,306 
Foreign (Canada)187 193 182 
Total$141,493 $93,040 $103,488 
Income tax expense included in the accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands): 
 202220212020
Continuing operations:
Current:
Federal$20,910 $12,369 $21,926 
Foreign50 52 78 
State and local7,299 3,397 5,584 
Total28,259 15,818 27,588 
Deferred:
Federal5,667 5,029 (1,968)
State and local2,195 1,282 (479)
Total7,862 6,311 (2,447)
Total income tax expense from continuing operations36,121 22,129 25,141 
Discontinued operations:
Operations of discontinued operations:
Current(7)(5)(11)
Total income tax benefit from discontinued
   operations		(7)(5)(11)
Total income tax expense$36,114 $22,124 $25,130 
The provision for income taxes attributable to income from continuing operations differed from the amount obtained by applying the federal statutory income tax rate to income from continuing operations before income taxes, as follows (in thousands, except percentages):
 202220212020
Tax at U.S. federal statutory rates$29,714 $19,538 $21,733 
State taxes (net of federal benefit)9,019 4,498 5,354 
Reserves for uncertain tax positions337 (104)(1,290)
Share-based compensation(6,832)(4,187)(2,394)
Non-deductible officers' compensation2,507 1,267 538 
Other, net1,376 1,117 1,200 
Provision for income taxes from continuing operations$36,121 $22,129 $25,141 
Effective income tax rate25.5 %23.8 %24.3 %
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021, were as follows (in thousands):
 20222021
Deferred tax assets:
Net operating loss carryforwards$1,473 $1,202 
Allowance for doubtful accounts4,682 3,613 
Employee benefits and compensation37,075 33,549 
Lease costs6,871 5,726 
Deferral of employer FICA taxes— 1,961 
Other deferred tax assets574 778 
Total gross deferred tax assets50,675 46,829 
Less: valuation allowance(3,156)(2,046)
Total deferred tax assets, net47,519 44,783 
Deferred tax liabilities:
Goodwill and other intangibles68,306 57,990 
Property and equipment1,185 1,488 
Other deferred tax liabilities2,791 745 
Total gross deferred tax liabilities72,282 60,223 
Deferred income taxes, net$(24,763)$(15,440)
We have established valuation allowances for deferred tax assets related to certain employee benefits and compensation and state net operating loss (“NOL”) carryforwards at December 31, 2022 and December 31, 2021. The net increase in the valuation allowance of $1.2 million for the year ended December 31, 2022 related to changes in the valuation allowance for NOLs and certain employee benefits and compensation.
In assessing the realization of deferred tax assets, management considers all available positive and negative evidence, including projected future taxable income, scheduled reversal of deferred tax liabilities, historical financial operations and tax planning strategies. Based upon review of these items, management believes it is more-likely-than-not that the Company will realize the benefits of these deferred tax assets, net of the existing valuation allowances.
We file income tax returns in the United States, Canada, and most state jurisdictions. CBIZ's federal income tax returns for years ending prior to January 1, 2019 are no longer subject to examination. With limited exceptions, our state and local income tax returns and non-U.S. income tax returns are no longer subject to tax authority examinations for years ending prior to January 1, 2018 and January 1, 2017, respectively.
The availability of NOLs and state tax credits are reported as deferred tax assets, net of applicable valuation allowances, in the accompanying Consolidated Balance Sheets. At December 31, 2022, we had state net operating loss carryforwards of $48.0 million and a state tax credit carryforward of $0.2 million. The state net operating loss carryforwards expire on various dates between 2023 and 2042 and the state tax credit carryforward expires in 2027.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
 202220212020
Balance at January 1$1,594 $1,536 $2,536 
Additions for tax positions of the current year175 161 150 
Additions for positions of prior years486 400 — 
Settlements of prior year positions— (374)— 
Lapse of statutes of limitation(144)(129)(1,150)
Balance at December 31$2,111 $1,594 $1,536 
Included in the balance of unrecognized tax benefits at December 31, 2022 are $1.4 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. We believe it is reasonably possible that certain of these unrecognized tax benefits could change in the next twelve months. We expect reductions in the liability for unrecognized tax benefits of approximately $0.1 million within the next twelve months due to expiration of statutes of limitation. Given the number of years that are currently subject to examination, we are unable to estimate the range of potential adjustments to the remaining balance of unrecognized tax benefits at this time.
We recognize interest expense and penalties related to unrecognized tax benefits as a component of income tax expense. During 2022, we recorded an immaterial increase in accrued interest, and, as of December 31, 2022, we had recognized a liability for interest expense and penalties of $0.3 million and $0.2 million, respectively, relating to unrecognized tax benefits. During 2021, we recorded an immaterial decrease in accrued interest, and, as of December 31, 2021, we had recognized a liability for interest expense and penalties of $0.2 million and $0.2 million, respectively, relating to unrecognized tax benefits.