5. Income Taxes

The components of current and deferred federal and state income tax (benefits) provision are as follows:


	Year Ended March 31,
	2020		2019		2018
	(In thousands)
Loss from continuing operations before income taxes	$	(5,450)	$	(7,780)	$	(5,586)

Current income tax provision:
Federal		—		—		3
State		34		36		45
Total current tax provision		34		36		48

Deferred income tax benefit:
Federal		105		—		(1,849)
State		21		—		(17)
Total deferred benefit provision		126		—		(1,866)
Provision (benefit) for income taxes on continued operations		160		36		(1,818)
Loss from continuing operations, net of taxes	$	(5,610)	$	(7,816)	$	(3,768)

The reconciliation of our income tax (benefit) provision to taxes computed at U.S. federal statutory rates is as follows:


	Year Ended March 31,
	2020		2019		2018
	(In thousands)
Benefit for income taxes at statutory rates	$	(1,095)	$	(1,634)	$	(1,720)
Change in federal tax rate		—		—		4,134
State income taxes net of federal benefit		(198)		(620)		(255)
Tax credits		(658)		(343)		(567)
Compensation charges		151		199		(324)
Change in valuation allowance		1,913		2,385		(3,153)
Other		47		49		67
Provision (benefit) for income taxes	$	160	$	36	$	(1,818)

The components of deferred tax assets and liabilities are as follows:


	March 31,
	2020		2019
	(In thousands)
Deferred tax assets:
Net operating losses	$	4,284	$	5,335
Capitalized R&D		3,520		2,347
Credit carry forwards		3,510		2,806
Deferred compensation and payroll		2,304		1,655
Bad debt allowance and other reserves		656		618
Deferred rent		—		202
Operating leases		219		—
Property and equipment		60		139
Other, net		556		309
Total deferred tax assets		15,109		13,411
Valuation allowance		(14,163)		(12,250)
Total deferred tax assets, net of valuation allowance		946		1,161
Deferred tax liabilities:
Acquired intangibles		(596)		(759)
Goodwill		(540)		(467)
Total deferred tax liabilities		(1,136)		(1,226)
Net deferred tax liabilities	$	(190)	$	(65)

At March 31, 2020, we had $551,000 in federal alternative minimum tax credit carryforwards, which were classified as a current income tax receivable included in the prepaid expenses and other current assets in the accompanying consolidated balance sheet. We also had $2.5 million in federal research credits that begin to expire in 2031 and $1.3 million in state tax credits that begin to expire in 2023. We had $10.7 million of federal net operating loss carryforwards at March 31, 2020 that do not expire as a result of recent tax law changes. We had $7.3 million of federal net operating loss carryforwards at March 31, 2020 that begin to expire in 2038. We also had $8.7 million of state net operating loss carryforwards at March 31, 2020 that begin to expire in 2036.

In assessing the realizability of our deferred tax assets, we review all available positive and negative evidence, including reversal of deferred tax liabilities, potential carrybacks, projected future taxable income, tax planning strategies and recent financial performance. As the Company has sustained a cumulative pre-tax loss over the trailing three years, we considered it appropriate to maintain valuation allowances of $14.2 million and $12.3 million against our deferred tax assets at March 31, 2020 and 2019, respectively. We will continuously reassess the appropriateness of maintaining a valuation allowance.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the Pandemic. The CARES Act contains 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. The CARES Act allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The income tax provisions of the CARES Act had an immaterial impact on our current taxes, deferred taxes, and uncertain tax positions of the Company.

Unrecognized Tax Benefits

As of March 31, 2020 and 2019, our gross unrecognized tax benefits were approximately $952,000 and $687,000, respectively, of which approximately $861,000, and $580,000, respectively, are netted against certain noncurrent deferred tax assets. The amounts that would affect our effective tax rate if recognized are approximately $840,000 and $609,000, respectively.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:


	Year Ended March 31,
	2020		2019		2018
	(In thousands)
Gross unrecognized tax benefits at beginning of year	$	687	$	586	$	426
Increases for tax positions taken in prior years		101		2		62
Decreases for tax positions taken in prior years		—		—		—
Increases for tax positions taken in the current year		180		116		122
Lapse in statute of limitations		(16)		(17)		(24)
Gross unrecognized tax benefits at March 31	$	952	$	687	$	586

We do not anticipate a significant change in gross unrecognized tax benefits within the next twelve months. We are subject to taxation in the U.S. and various state tax jurisdictions. We are subject to U.S. federal tax examination for fiscal tax years ended March 31, 2017 or later, and state and local income tax examination for fiscal tax years ended March 31, 2016 or later. However, if net operating loss carryforwards that originated in earlier tax years are utilized in the future, the amount of such NOLs from such earlier years remain subject to review by tax authorities.