Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) are as follows:

(in thousands)	Year Ended December 31, 2019			Year Ended December 31, 2018
Federal - current	$	(30	)	$	-
State - current		1			5
Total current		(29	)		5

Federal - deferred		(869	)		312
State - deferred		(816	)		(7,755	)
Change in valuation allowance		1,685			6,052
Total deferred		-			(1,391	)
Income tax expense (benefit)	$	(29	)	$	(1,386	)

Income Tax Reconciliation

The components of pretax income (loss) and the difference between income taxes computed at the statutory federal rate and the provision for income taxes are as follows:

(in thousands)	Year Ended December 31, 2019			Year Ended December 31, 2018

Income (loss) before income taxes	$	(4,955	)	$	(1,051	)
Tax expense (benefit) :
Tax at statutory federal rate	$	(1,041	)	$	(221	)
State income taxes		(643	)		(59	)
Rate change		-			(5,759	)
Permanent items, tax credits and other adjustments		(30	)		118
AMT – Sequestration Reversal (change in law)		-			(1,391	)
Deferred true-ups		-			(126	)
Change in valuation allowance		1,685			6,052
Income tax expense (benefit)	$	(29	)	$	(1,386	)

A reconciliation of the United States federal statutory rate to the Company’s effective income tax rate is as follows:

	Year Ended December 31, 2019			Year Ended December 31, 2018
Tax at statutory federal rate		21.0	%		21.0	%
State income taxes		13.0			5.6
Rate change		-			548.0
Permanent difference, tax credits and other adjustments		0.6			(11.2	)
AMT – Sequestration Reversal (change in law)		-			132.4
Deferred true-ups		-			12.0
Change in valuation allowance		(34.0	)		(575.9	)
Effective income tax rate		0.6	%		131.9	%

Alternate Minimum Tax Credit Carryforwards

AMT credit carryforwards available, which can be used to offset income generated in future years which are not subject to expiration, are as follows:

		Amount
AMT Credits carryforwards		$	5,370,000

Alternative Minimum Tax ("AMT") Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year

The Company’s AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year are as follows:

Tax Year (a)	Declining balance of the AMT credit carryforward amount(s) available for each tax year (a)(b)		% of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year			AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year (a)(b)
2020	$	5,370,000		50	%	$	2,685,000
2021		2,685,000		100	%		2,685,000
						$	5,370,000

(a)

Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded.

(b)

See herein with regard the filing of the Company’s 2019 federal income tax return and the March 2020 federal tax refund received.

Calculation of Net Deferred Tax Assets from NOL Carryforwards

The Company has a deferred tax asset arising primarily from NOL carryforwards and AMT credit carryforwards as follows:

	December 31, 2019			December 31, 2018
Deferred tax asset	$	40,815,000		$	44,501,000
Valuation allowance		(35,445,000	)		(33,760,000	)
Net deferred tax asset recognized	$	5,370,000		$	10,741,000