|12 Months Ended|
Dec. 31, 2021
|Income Tax Disclosure [Abstract]|
NOTE 9—INCOME TAXES
The provision for income taxes consists of the following for the years ended December 31, 2021 and 2020 (in thousands):
Deferred tax assets consist of the following as of December 31, 2021 and 2020 (in thousands):
Deferred tax liabilities consist of the following as of December 31, 2021 and 2020 (in thousands):
A valuation allowance for the net deferred tax assets is recorded when it is more likely than not that the Company will not realize these assets through future operations. The valuation allowance increased by approximately $2.7 million for the years ended December 31, 2021, while it decreased by $0.6 million for the years ended December 31, 2020.
As of December 31, 2021 and December 31, 2020, the Company had net operating loss carryforwards for federal income tax purposes of approximately $62.6 million and $63.1 million, respectively, available to offset future federal taxable income, if any. Net operating loss generated in 2017 and prior years expire in various years through 2037. Net operating losses for federal income tax purpose generated in 2018 and after will be available indefinitely. In addition, the Company had net operating loss carryforwards for state income tax purposes of approximately $57.8 million and $57.6 million respectively, which expire in various years through 2041. As of December 31, 2021 and December 31, 2020, the Company has general business tax credits of $11.4 million and $10.5 million, respectively, for federal income tax purposes. The tax credits are available to offset future tax liabilities, if any, through 2041. The Company’s utilization of net operating loss carryforwards could be subject to an annual limitation as a result of certain past or future events, such as stock sales or other equity events constituting a “change in ownership” under the provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations could result in the expiration of net operating loss carryforwards and tax credits before they can be utilized.
The income tax provision differs from that computed using the statutory federal tax rate of 21% due to the following factors (in thousands):
As of December 31, 2021 and December 31, 2020, the Company had no unrecognized tax benefits or position which, in the opinion of management, would be reversed if challenged by a taxing authority. In the event the Company is assessed interest or penalties, such amounts would be classified as income tax expense. As of December 31, 2021, all federal tax returns since 2018 are subject to audit. The expiration of the state returns varies by state, but the 2017 and subsequent years’ returns generally are subject to audit. No tax returns are currently being examined by taxing authorities.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef