NOTE E—INCOME TAXES - CONTINUED

Income tax expense (benefit) included in income from continuing operations consists of the following:

The effective tax rate for 2019, 2018, and 2017 reconciled to the statutory U.S. Federal tax rate is as follows:

NOTE E—INCOME TAXES – CONTINUED

The significant categories of deferred taxes are as follows:

The Components of net deferred taxes on a jurisdiction basis are as follows:

As of December 28, 2019, the Company had foreign tax credit carryforwards of approximately $57,749. If unused, these carryforwards will expire between 2026 and 2029. Because the U.S. tax rate is lower than most of the foreign tax rates where the Company has operations, the Company expects to continue generating excess foreign tax credits in future years. As of December 28, 2019 and December 29, 2018, the Company has placed a full valuation allowance on its foreign tax credit carryforwards. Valuation allowances are determined using a more-likely-than-not realization criteria and are based upon all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. The U.S. jurisdiction has experienced overall cumulative domestic losses over the previous three years, which is a significant piece of negative evidence for the future utilization of foreign tax credit carryforwards. If in future periods, domestic source income becomes significant, the Company will evaluate this source of future taxable income for purposes of the determining a change in this valuation allowance.

NOTE E—INCOME TAXES – CONTINUED

The Company recorded a $1,863 valuation allowance on mirrored deferred tax assets recorded in the U.S. to offset deferred tax liabilities of foreign disregarded entities, which will generate additional U.S. foreign tax credits in the future. This valuation allowance is necessary because the Company is limited in its ability to utilize future U.S. foreign tax credits due to the decrease in the U.S. corporate tax rate.

The Company also has $1,135 of Utah research credit carryforwards, $772 of Philippines minimum income tax credit carryforwards, and $1,041 of Federal research credit carryforwards as of December 28, 2019. If unused, the Utah research credit carryforwards expire between 2027 and 2033, the Philippines’ minimum income tax credit carryforwards expire between 2020 and 2021, and the Federal research credits expire between 2036 and 2039. Utah research credits are limited to Utah tax due, which has declined because of overall domestic losses. The Philippines’ minimum income tax credit carryforwards can be used against Philippines regular tax. Although minimum income tax credits were used in 2019 in the Philippines, there is not sufficient positive evidence available yet that the Philippines will be able to use additional