v3.22.4
Income taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The provision (benefit) for income taxes consists of the following (in thousands):
2022CurrentDeferredTotal
Federal$161,438 $13,435 $174,873 
State and other23,456 4,041 27,497 
Total$184,894 $17,476 $202,370 
2021CurrentDeferredTotal
Federal$114,255 $15,400 $129,655 
State and other11,310 (5,484)5,826 
Total$125,565 $9,916 $135,481 
2020CurrentDeferredTotal
Federal$123,882 $4,532 $128,414 
State and other21,878 4,001 25,879 
Total$145,760 $8,533 $154,293 

Income before income taxes attributable to TEGNA Inc. consists entirely of domestic income.

The provision for income taxes varies from the U.S. federal statutory tax rate as a result of the following differences:
202220212020
U.S. statutory tax rate21.0%21.0%21.0%
Increase (decrease) in taxes resulting from:
State taxes (net of federal income tax benefit)2.72.63.3
Uncertain tax positions, settlements and lapse of statutes of limitations—0.3(0.1)
Valuation allowance on equity method investment0.6—0.4
Other valuation allowances, tax rate changes, & deferred adjustments(0.6)(1.7)(0.1)
Non-deductible transaction costs0.50.1—
Net excess benefits or expense on share-based payments(0.3)(0.2)(0.1)
Other, net
0.4—(0.2)
Effective tax rate24.3%22.1%24.2%
    
Deferred income taxes reflect temporary differences in the recognition of revenue and expense for tax reporting and financial statement purposes. Deferred tax liabilities and assets are adjusted for changes in tax laws or tax rates of the various tax jurisdictions as of the enacted date.
Deferred tax liabilities and assets were composed of the following as of December 31, 2022 and 2021 (in thousands):
Dec. 31,
20222021
Deferred tax liabilities
Accelerated amortization of deductible intangibles$540,260 $534,438 
Accelerated depreciation67,278 67,697 
Right-of-use assets for operating leases19,467 21,648 
Other4,183 3,792 
Total deferred tax liabilities631,188 627,575 
Deferred tax assets
Accrued compensation costs23,439 24,147 
Pension and post-retirement medical and life20,775 17,400 
Loss carryforwards12,537 31,841 
Operating lease liabilities20,403 22,582 
Other24,242 25,160 
Total deferred tax assets101,396 121,130 
Deferred tax asset valuation allowance26,339 41,929 
Total net deferred tax liabilities$556,131 $548,374 

As of December 31, 2022, we had approximately $5.1 million of state net operating loss carryovers that, if not utilized, will expire in various amounts beginning in 2023 through 2041 in addition to $1.8 million of federal and $9.1 million of state interest disallowance carryforwards that do not expire.

Included in total deferred tax assets are valuation allowances of approximately $26.3 million as of December 31, 2022 and $41.9 million as of December 31, 2021, primarily related to minority investments, federal and state interest disallowance carryforwards, accrued compensation costs, state net operating loss carryforwards, and state capital loss carryforwards. This $15.6 million change in valuation allowance is primarily the result of federal and state capital loss carryforwards expiring on December 31, 2022 and accounted for $14.3 million of the decrease. The capital loss carryforward deferred tax asset and associated valuation allowance were both reduced in equal amounts for the expired tax attribute. If, in the future, we believe that it is more likely than not that deferred tax assets with valuation allowances recorded against them will be realized, the valuation allowances will be reversed in the Consolidated Statements of Income.

Realization of deferred tax assets for which valuation allowances have not been established is dependent upon generating sufficient future taxable income. We expect to realize the benefit of these deferred tax assets through future reversals of our deferred tax liabilities, through the recognition of taxable income in the allowable carryback and carryforward periods, and through implementation of future tax planning strategies. Although realization is not assured, we believe it is more likely than not that all deferred tax assets for which valuation allowances have not been established will be realized.

The following table summarizes the activity related to deferred tax asset valuation allowances (in thousands):
202220212020
Beginning at beginning of period$41,929 $43,467 $45,661 
Additions to valuation allowance7,228 6,108 3,719 
Reductions to valuation allowance(22,818)(7,646)(5,913)
Balance at the end of the period$26,339 $41,929 $43,467 

Tax Matters Agreements

Prior to the May 31, 2017 spin-off of the Cars.com business, we entered into a Tax Matters Agreement with Cars.com Inc. that governs each company’s respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns. The agreement provides that we will generally indemnify Cars.com against taxes attributable to assets or operations for all tax periods or portions thereof prior to the spin-off date including separately-filed U.S. federal, state, and foreign taxes. Our 2017 tax year is currently under examination by the Internal Revenue Service and the relevant federal statute of limitations remains open until November 30, 2023.
Uncertain Tax Positions

The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state tax deductions (in thousands):
202220212020
Change in unrecognized tax benefits
Balance at beginning of year$8,196 $7,435 $8,050 
Additions for tax positions of prior years— 1,363 630 
Settlements(9)— — 
Reductions due to lapse of statutes of limitations(462)(602)(1,245)
Balance as of end of year$7,725 $8,196 $7,435 

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $6.4 million as of December 31, 2022, and $6.8 million as of December 31, 2021. This amount includes the federal tax benefit of state tax deductions.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. We also recognize interest income attributable to overpayment of income taxes and from the reversal of interest expense previously recorded for uncertain tax positions which are subsequently released as a component of income tax expense. We recognized expense from interest for uncertain tax positions of $0.2 million in 2022 and $0.7 million in 2021. We did not recognize income or expense in 2020. The amount of accrued interest expense and penalties payable related to unrecognized tax benefits was $0.9 million as of December 31, 2022 and $0.7 million as of December 31, 2021.

We file income tax returns in the U.S. and various state jurisdictions. The 2016 through 2022 tax years remain subject to examination by the Internal Revenue Service and state authorities. Tax years before 2016 remain subject to examination by certain states due to ongoing audits.

It is reasonably possible that the amount of unrecognized benefit with respect to certain of our unrecognized tax positions will increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits, lapses of statutes of limitations or other regulatory developments. At this time, we estimate the amount of our gross unrecognized tax positions may decrease by up to approximately $2.1 million within the next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits in various jurisdictions.