Income Taxes

3 Months Ended

Mar. 30, 2019

Income Taxes

I. Income Taxes

As of March 30, 2019 and December 29, 2018, the Company had approximately $0.9 million and $0.9 million, respectively, of unrecognized income tax benefits.

The Company’s practice is to classify interest and penalties related to income tax matters in income tax expense. As of March 30, 2019 and December 29, 2018, the Company had $0.1 million and $0.1 million, respectively, accrued for interest and penalties.

The Internal Revenue Service completed an examination of the 2015 consolidated corporate income tax return and issued a no change report in 2018. The Company’s state income tax returns remain subject to examination for three or four years depending on the state’s statute of limitations. The Company is being audited by one state as of March 30, 2019. In addition, the Company is generally obligated to report changes in taxable income arising from federal income tax audits.

The following table provides a summary of the income tax provision for the thirteen weeks ended March 30, 2019 and March 31, 2018:

	Thirteen weeks ended
	March 30,			March 31,
	2019			2018
	(in thousands)
Summary of income tax provision (benefit)
Tax provision based on net income	$	7,909		$	2,571
Benefit of ASU 2016-09		(1,775	)		(2,723	)
Total income tax provision (benefit)	$	6,134		$	(152	)

The Company’s effective tax rate for the thirteen weeks ended March 30, 2019, excluding the impact of ASU 2016-09, decreased to 26.5% from 28.0% for the thirteen weeks ended March 31, 2018, primarily due to a decrease in non-deductible officer compensation under IRC Section 162(m).