
	Year Ended December 31,
	2020		2019		2018
Current tax provision:
Foreign	$	224	$	201	$	212
Federal	8,080		4,668		1,283
State	2,780		1,591		182
Total Current	11,084		6,460		1,677

Deferred tax provision:
Federal	1,089		1,290		93
State	344		573		98
Total deferred	1,433		1,863		191
Total tax provision:	$	12,517	$	8,323	$	1,868

A reconciliation between the income tax provision (benefit) at the U.S. statutory tax rate and the Company’s income tax provision on the consolidated statements of operations and comprehensive income (loss) is below (in thousands):


	Year Ended December 31,
	2020			2019			2018
Income (loss) before income taxes	$	46,301		$	27,932		$	(5,376)
U.S. statutory tax rate	21		%	21		%	21		%
Income tax expense (benefit) at statutory rate	9,723			5,866			(1,129)

State tax expense, net of federal	2,530			1,639			145
Foreign tax rates different from U.S. statutory rate	264			260			146
Non-deductible expenses	57			374			1,978
Write-off of transaction costs	—			—			321
Write-off of net operating losses	—			—			314
Change in tax rate	(9)			71			76
Other	(48)			113			17
Total tax provision	$	12,517		$	8,323		$	1,868

As presented in the income tax reconciliation above, the tax provision recognized on the consolidated statements of operations and comprehensive income (loss) was impacted by state taxes, non-deductible expenses, such as offering costs, share-based compensation expense, transaction costs and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate. The Company is subject to tax in various U.S. state jurisdictions. Changes in the annual allocation and apportionment of the Company’s activity amongst these state jurisdictions results in changes to the blended state rate utilized to measure the Company’s deferred tax assets and liabilities.

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal components of the deferred tax assets and liabilities (in thousands):


	December 31,
	2020		2019
Deferred tax assets:
U.S. federal and state net operating losses	$	5,529	$	6,385
Foreign net operating losses	165		73
Allowance for credit losses	483		275
Share-based compensation	1,468		897
Accrued compensation	487		279
Deferred revenue	725		653
Accrued TCPA claim	—		880
Total deferred tax assets	8,857		9,442

Deferred tax liabilities
Depreciation	(2,460)		(1,918)
Intangible amortization	(6,924)		(6,710)
Total deferred tax liabilities	(9,384)		(8,628)

Valuation allowance	(165)		(73)

Net deferred tax (liability) asset	$	(692)	$	741

At December 31, 2020, the Company had federal and state net operating loss carryforwards of approximately $22.7 million and $19.8 million, respectively, which are available to reduce future taxable income. With few exceptions, these net operating loss carryforwards will expire from 2029 through 2037. Utilization of the Company’s net operating loss carryforwards is now subject to an annual limitation under Internal Revenue Code Section 382. The Company has recorded a deferred tax asset for only the portion of its net operating loss carryforward that it expects to realize before expiration.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for the years prior to 2016. However, the Company has certain net operating loss carryforwards from tax years 2009 through 2017 that are subject to examination. As of December 31, 2020 and 2019, the Company did not have any amounts accrued for interest and penalties or recorded for uncertain tax positions.

In 2018, FinTech Acquisition Corp II was notified by the IRS that its 2017 federal income tax return was selected for examination. In 2019, the exam was closed with no adjustments to the reported tax. In January 2020, Intermex Holdings II, Inc., the Company’s parent company prior to the Merger, was notified by the IRS that its 2017 federal income tax return was selected for examination. In August 2020, the examination was closed with no changes to the reported tax. As of December 31, 2020 and 2019, no amounts for tax, interest, or penalties have been paid or accrued as a result of this examination.

In accordance with criteria under FASB guidance, Income Taxes, a valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized. After consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required at December 31, 2020 or 2019 on the Company’s U.S. deferred tax assets. However, a valuation allowance of $165.0 thousand and $73.3 thousand as of December 31, 2020 and 2019, respectively, has been recorded on deferred tax assets associated with Canadian net operating loss carryforwards.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. The CARES Act provides various tax law changes in response to the COVID-19 pandemic, including increasing the ability to deduct interest expense, providing for deferral on tax deposits, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. After considering the provisions of the CARES Act, the Company determined that the CARES Act did not have a material effect on its annual effective tax rate and the income tax provision for the year ended December 31, 2020.