The table below sets forth our (loss) income before taxes for the years ended December 31:

The table below sets forth the components of our income tax provision (benefit) for the years ended December 31:

	2020			2019		2018
Current tax provision
Federal	$	631		$	259	$	-
Foreign		17,115			28,829		42,726
State		56			92		24
		17,802			29,180		42,750
Deferred tax provision (benefit)
Federal		6,411			886		2,400
Foreign		(6,210	)		11,994		(3,107	)
State		65			30		56
		266			12,910		(651	)

Liability for unrecognized tax benefits		3,044			2,041		2,457
Total income tax provision	$	21,112		$	44,131	$	44,556

The table below sets forth a reconciliation between the effective tax rate and the statutory tax rates for the years ended December 31:

	2020						2019						2018
				Percent						Percent						Percent
				of pretax						of pretax						of pretax
	Amount			earnings*			Amount			earnings*			Amount			earnings*
Federal tax	$	25,272			21.0		$	41,632			21.0		$	31,488			21.0
State income taxes, net of federal tax provision		(378	)		(0.3	)		1,389			0.7			(375	)		(0.3	)
Foreign income taxed at different tax rates		81			0.1			(5,786	)		(2.9	)		(2,844	)		(1.9	)
U.S. tax impact of foreign operations		(3,031	)		(2.5	)		(3,340	)		(1.7	)		4,140			2.8
Foreign withholding taxes		(1,798	)		(1.5	)		22,685			11.4			10,962			7.3
Research and development		(4,210	)		(3.5	)		(3,686	)		(1.9	)		(3,541	)		(2.4	)
Liability for unrecognized tax benefits		3,044			2.5			2,041			1.0			2,457			1.6
Valuation allowance		2,199			1.8			(10,563	)		(5.3	)		(379	)		(0.3	)
Employee stock-based compensation		(660	)		(0.5	)		(52	)		-			(2,154	)		(1.4	)
U.S. Tax Cuts and Jobs Act		-			-			-			-			2,762			1.8
Other		593			0.5			(189	)		(0.1	)		2,040			1.4
Income tax provision	$	21,112			17.5		$	44,131			22.3		$	44,556			29.7

In accordance with the provisions related to accounting for uncertainty in income taxes, we recognize the benefit of a tax position if the position is “more likely than not” to prevail upon examination by the relevant tax authority. The table below sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	2020			2019			2018
Balance at January 1,	$	35,652		$	32,209		$	30,581
Additions based on tax positions related to the current year		7,495			9,274			4,667
Additions for prior year tax positions		4,952			39			-
Reductions for prior year tax positions		(5,633	)		(5,870	)		(3,039	)
Balance at December 31,	$	42,466		$	35,652		$	32,209

If the $42.5 million of unrecognized tax benefits as of December 31, 2020, is recognized, approximately $40.3 million would affect the effective tax rate. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of settlements of ongoing audits or competent authority proceedings. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012 or tax year 2015. We are no longer subject to China income tax examinations by tax authorities for tax years before 2010. With respect to state and local jurisdictions and countries outside of the U.S., with limited exceptions, we are no longer subject to income tax audits for years before 2015. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties, if any, have been provided for in our reserve for any adjustments that may result from future tax audits. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. We had an immaterial amount of accrued interest and penalties at December 31, 2020, 2019 and 2018.

The table below sets forth our deferred tax assets and liabilities as of December 31:

	2020			2019
Deferred tax assets
Inventory cost	$	15,154		$	10,423
Accrued expenses and accounts receivable		5,294			4,420
Foreign tax credits		-			5,848
Research and development tax credits		15,807			16,263
Net operating loss carryforwards		42,734			24,139
Lease obligations		2,982			3,773
Plant, equipment and intangible assets		162			-
Accrued pension		6,386			4,629
Share based compensation and others		8,810			7,805
		97,329			77,300
Valuation allowances		(45,591	)		(29,414	)
Total deferred tax assets, non-current		51,738			47,886
Deferred tax liabilities
Plant, equipment and intangible assets		-			(13,816	)
Right of use assets		(2,936	)		(4,008	)
Outside basis differences and others		(13,467	)		(23,648	)
Total deferred tax liabilities, non-current		(16,403	)		(41,472	)
Net deferred tax assets	$	35,335		$	6,414

ASU No. 2013-11 provides that an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The $23.2 million net deferred tax assets presented in the balance sheet as of December 31, 2020, is net of $12.3 million of unrecognized tax benefits. The $35.3 million and $6.4 million net deferred tax asset presented above for December 31, 2020 and 2019, respectively, is prior to the net balance sheet presentation required by ASU 2013-11.

At December 31, 2020, we had federal and state tax credit and research credit carryforwards of approximately $7 million and $9 million, respectively, which are available to offset future income tax liabilities. The federal tax credit carryforwards begin to expire in 2032 and the state tax credit carryforwards will begin to expire in 2020. Consistent with prior years, we determined that it is more likely than not that our state research credit carryforwards will expire before they are utilized. During 2019 we determined that it is more likely than not that our federal tax credit carryforwards will be utilized before expiration. We released the previously recorded valuation allowances as a credit to income tax expense. The valuation allowances recorded against the related deferred tax assets totaled $8 million as of December 31, 2020 and 2019.

At December 31, 2020, we had state net operating loss (“NOL”) carryforwards of approximately $1 million, and foreign NOL carryforwards of $209 million which are available to offset future taxable income. The state NOL carryforward will begin to expire in 2021. We determined that it is more likely than not that the state NOL carryforwards will expire before they are fully utilized and recorded a full valuation allowance on the related deferred tax assets. The foreign NOL carryforwards will begin to expire in 2021. We determined that it is more likely than not that a portion of the foreign NOL carryforwards will expire before they are fully utilized. The valuation allowances recorded against the related deferred tax assets totaled $32 million and $19 million as of December 31, 2020 and 2019, respectively.

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European and Asian subsidiaries. As of December 31, 2020, we had undistributed earnings from non-U.S. operations of approximately $1.6 billion (including approximately $287 million of restricted earnings, which are not available for dividends). Undistributed earnings of our China subsidiaries comprise $469 million of this total. Additional Chinese withholding taxes of approximately $45 million would be required should the $469 million of such earnings be distributed out of China as dividends.

The impact of tax holidays decreased our tax expense by approximately $0.9 million, $3.1 million and $1.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. The benefit of the tax holidays on basic and diluted earnings per share was $0.02, $0.06 and $0.03 for the twelve months ended December 31, 2020, 2019 and 2018, respectively.