The following is a reconciliation of the provision for income taxes computed at the federal statutory rate to income taxes computed at the effective rates for the years ended December 31, 2019, 2018 and 2017:

	2019			2018			2017

Consolidated tax provision at federal statutory rate		21.0	%		21.0	%		35.0	%
State income tax provisions, net of federal income tax benefit		2.6			1.6			1.7
Tax reserve adjustment		-			0.1			0.1
Changes in certain deferred tax balances		(2.3	)		(3.5	)		(0.4	)
Goodwill impairment		(11.8	)		(10.4	)		(19.1	)
Share-based payments		(0.1	)		(0.5	)		-
Federal research and development credit		-			0.1			0.1
Deferred Tax Remeasurement - 2017 Tax Reform		-			0.6			26.1
All other, net		-			(0.2	)		(0.1	)
Effective tax rate		9.4	%		8.8	%		43.4	%

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly known as the Tax Cut and Jobs Act (the TCJA). The TCJA, makes broad and complex changes to the U.S. tax code. The TCJA reduces the corporate tax rate to 21%, effective January 1, 2018. Under ASC 740, the effects of new legislation are recognized upon enactment. Accordingly, recognition of the tax effects of the TCJA were required in the interim and annual periods that include December 22, 2017.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, the Company previously provided provisional estimates of the effect of the TCJA in the financial statements. In the fourth quarter of 2018, the Company completed our analysis to determine the effects of the TCJA and recorded immaterial adjustments as of December 31, 2018.

On July 1, 2019, the Board of Directors of Frontier Communications adopted a shareholder’s right plan (Rights Agreement) designed to protect the availability of the net operating loss carryforwards under the Internal Revenue Code (IRC). The Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the IRC by deterring any person or group of affiliated or associated persons from acquiring beneficial ownership of 4.9% or more of the outstanding common shares.

On March 18, 2020, the Families First Coronavirus Response Act (FFCR Act), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the use of net operating losses arising in taxable years beginning after December 31, 2017.

Income taxes includes the tax impact of $524 million, $72 million, and $608 million related to the goodwill impairment for the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, amounts pertaining to expected income tax refunds of $1 million are included in “Income taxes and other current assets” in the consolidated balance sheet.

($ in millions)	2019			2018

Deferred income tax liabilities:
Property, plant and equipment basis differences	$	2,184		$	2,182
Intangibles		-			18
Deferred revenue/expense		65			66
Other, net		56			-
	$	2,305		$	2,266

Deferred income tax assets:
Pension liability	$	256		$	209
Intangibles		665			-
Tax operating loss carryforward		898			1,027
Employee benefits		184			176
Interest expense deduction limitation carryforward		238			104
Accrued expenses		37			41
Lease obligations		92			33
Tax credit		39			37
Allowance for doubtful accounts		32			26
Other, net		7			1
		2,448			1,654
Less: Valuation allowance		(605	)		(497	)
Net deferred income tax asset		1,843			1,157
Net deferred income tax liability	$	462		$	1,109

Our federal net operating loss carryforward as of December 31, 2019 is estimated at $1.6 billion. The majority of the federal loss carryforward will begin to expire after 2036, with $202 million carrying forward indefinitely, unless otherwise used.

Our state tax operating loss carryforward as of December 31, 2019 is estimated at $9.8 billion. A portion of our state loss carryforward will continue to expire annually through 2039, unless otherwise used.

Our federal research and development credit as of December 31, 2019 is estimated at $21 million. The federal research and development credit will expire between 2034 and 2039, unless otherwise used.

As of December 31, 2019, Frontier has a valuation allowance of $605 million to reduce deferred tax assets to an amount more likely than not to be realized. This valuation allowance is related to state net operating losses, state tax credits, and the state impact from the federal limitation on interest expense deduction. In evaluating Frontier’s ability to realize its deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management also considered the projected reversal of deferred tax liabilities and projected future taxable income in making this assessment. Based upon this assessment, management believes it is more likely than not Frontier will realize the benefits of these deductible differences, net of valuation allowance.

The provision (benefit) for federal and state income taxes, as well as the taxes charged or credited to equity of Frontier, includes amounts both payable currently and deferred for payment in future periods as indicated below:

($ in millions)	2019			2018			2017

Income tax expense (benefit):
Current:
Federal	$	1		$	(1	)		(4	)
State		7			6			5
Total Current		8			5			1

Deferred:
Federal		(606	)		(77	)		(1,312	)
State		(13	)		10			(72	)
Total Deferred		(619	)		(67	)		(1,384	)
Total income tax benefit		(611	)		(62	)		(1,383	)

Income taxes charged (credited) to equity of Frontier:
Utilization of the benefits arising from restricted stock		-			-			(1	)
Deferred income taxes (benefits) arising from the recognition of additional pension/OPEB liability		32			(31	)		7

Total income taxes charged (credited) to equity of Frontier		32			(31	)		6
Total income tax benefit	$	(579	)	$	(93	)	$	(1,377	)

U.S. GAAP requires applying a “more likely than not” threshold to the recognition and derecognition of uncertain tax positions either taken or expected to be taken in Frontier’s income tax returns. The total amount of our gross tax liability for tax positions that may not be sustained under a “more likely than not” threshold amounts to $12 million as of December 31, 2019, including immaterial interest. The amount of our uncertain tax positions, for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease during the next twelve months, and which would affect our effective tax rate, is $0 as of December 31, 2019.

Frontier’s policy regarding the classification of interest and penalties is to include these amounts as a component of income tax expense. This treatment of interest and penalties is consistent with prior periods. We are subject to income tax examinations generally for the years 2015 forward for federal and 2015 forward for state filing jurisdictions. We also maintain uncertain tax positions in various state jurisdictions.

($ in millions)	2019		2018

Unrecognized tax benefits - beginning of year	$	11	$	12
Gross increases - prior year tax positions		-		-
Gross increases - current year tax positions		1		-
Gross decreases - FIN 48 liability release		-		-
Gross decreases - expired statute of limitations		-		(1	)
Unrecognized tax benefits - end of year	$	12	$	11