The provision (benefit) for income taxes consists of the following for the years ended February 2, 2019 and February 3, 2018.

(dollars in thousands)	2018			2017
Current
Federal	$	57		$	—
State		(113	)		234
		(56	)		234

Deferred
Federal		87			705
State		21			302
		108			1,007

Provision for Income Tax	$	52		$	1,241

On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted by the U.S. government. The TCJA contains several key provisions that affected the Company. The enacted provision impacted prior year financial statements and included a permanent reduction of the U.S. corporate income tax rate from 35 to 21 percent, effective January 1, 2018. As of February 2, 2019, U.S. statutory federal income tax rate was 21.0%. Because the Company had a February 3, 2018 fiscal year-end, the impact of the lower rate was phased in resulting in a U.S. statutory federal tax rate of approximately 33.7% for the fiscal year ended February 3, 2018. The 21% U.S. statutory federal rate applied to the fiscal year ended February 2, 2019.

The Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118) to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA. The ultimate impact may differ from provisional amounts recorded, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, and additional regulatory guidance that may be issued. The accounting is expected to be completed within one year from the enactment date of the TCJA.

The Company recorded a provisional income tax effect of $0.0 million, after considering changes to the valuation allowance, in its consolidated financial statements for the fiscal year ended February 3, 2018. The Company was able to determine a reasonable estimate for the re-measurement of the Company’s U.S. federal deferred tax assets and liabilities at the lower rate (a reduction to net deferred tax assets of approximately $18.8 million offset by an equal reduction to the valuation allowance). The Company did a review of the full valuation allowance and determined no changes were deemed necessary to the provisional income tax effect for the previous fiscal year or the fiscal year ended February 2, 2019.

The income tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of year-end are presented below:

(dollars in thousands)	2018			2017
Deferred income tax assets:
Accrual for incentive compensation	$	4,515		$	2,782
Allowance for doubtful accounts		355			653
Insurance accruals		2,171			1,508
Other accruals		642			604
Net operating loss carryforwards		41,333			48,087
Deferred Revenue		199			352
Federal benefit on state reserves		—			55
WOTC Credit Carryforward		6,259			5,295
Property, plant and equipment		4,064			—
Amortization of intangibles		10,478			16,925
Postretirment benefits		142			159
Contribution Carryforward		312			315
Total deferred income tax assets		70,470			76,735
Less: Valuation allowance		63,046			59,299
Deferred income tax assets, net of valuation allowance		7,424			17,436

Deferred income tax liabilities:
Postretirement benefits		—			—
Property, plant and equipment		—			(5,567	)
Inventory valuation		(6,950	)		(11,173	)
Prepaid expenses		(474	)		(588	)
Total deferred income tax liabilities		(7,424	)		(17,328	)

Net deferred income tax assets/liabilities	$	—		$	108

The net operating loss carryforwards are available to reduce federal and state income taxes in future years. The federal carryforward is approximately $118.0 million and will expire in 2036. Carryforwards total approximately $323.2 million for state income tax purposes and expire at various times during the fiscal years 2019 through 2036. Federal income tax credit carryforwards total approximately $5.3 million and will expire in 2036.

We maintain a valuation allowance for federal and state net operating losses and tax credits that we do not expect to utilize prior to their expiration. The valuation allowance increased $4.3 million and $37.1 million for the fiscal year ended February 2, 2019 and February 3, 2018, respectively. Based upon the expected reversal of deferred tax liabilities, management believes that it is more likely than not that the results of operations will not generate sufficient taxable income to realize the deferred income tax.

A reconciliation of the statutory federal income tax rate to the effective income tax rate is as follows:

	2018				2017
Income tax provision at statutory rate		21.0		%		33.7
State income taxes, net of federal benefit		4.7				3.5
Tax credits, principally jobs		0.2				0.6
Uncertain tax provisions		0.1				—
Change in valuation allowance		(25.8	)			(25.4	)
TCJA Rate Change		—				(13.7	)
Other		—				1.3
Permanent differences		(0.2	)			(0.9	)
Effective income tax rate		(0.0	)	%		(0.9	)

A reconciliation of the beginning and ending amount of the unrecognized tax benefits is as follows:

(in millions)	2018			2017
Beginning balance	$	2.3		$	0.4
Additions for tax positions of prior years		—			0.5
Additions for current year tax positions		—			1.4
Deductions for tax position for prior years		(2.0	)		—
Settlements of tax position for prior years		(0.3	)		—
Balance at February 2,2019	$	—		$	2.3

As of February 2, 2019, the Company had no liability for unrecognized tax benefits. As of February 3, 2018, the Company recognized a liability for unrecognized tax benefits of $2.3 million recorded in the Consolidated Balance Sheet within “Other noncurrent liabilities.” The Company utilized $2.0 million of the prior year liability as tax deductions and $0.3 million of the prior year liability was utilized for settlements. Examinations by the state jurisdictions are expected to be completed within the next 12 months which could result in a change to our unrecognized tax benefits, but we are unable to estimate the amounts.

ASC 740 further requires that interest and penalties required to be paid by the tax law on the underpayment of taxes should be accrued on the difference between the amount claimed or expected to be claimed on the tax return and the tax benefit recognized in the financial statements. The Company includes potential interest and penalties recognized in accordance with ASC 740 in the financial statements as a component of income tax expense. As of February 2, 2019, accrued interest and penalties related to our unrecognized tax benefits totaled $0.0 million and $0.0 million, respectively. As of February 3, 2018, accrued interest and penalties related to our unrecognized tax benefits totaled $0.1 million and $0.1 million, respectively. Both accrued interest and penalties are recorded in the Consolidated Balance Sheet within “Other noncurrent liabilities.”

The Company files numerous consolidated and separate company income tax returns in the U.S. federal jurisdiction and in many U.S. state jurisdictions. With few exceptions, we are subject to U.S. federal, state, and local income tax examinations by tax authorities for years 2013-2016. However, tax authorities have the ability to review years prior to these to the extent we utilized tax attributes carried forward from those prior years.