15. Income Taxes

At December 31, 2015, the Company had federal and state net operating loss carryforwards of $281.6 million and $173.7 million, respectively, available to offset against future taxable income, which expire in 2016 through 2034.

As a result of a change in-control that occurred in the CytRx shareholder base, approximately $62.3 million in federal net operating loss carryforwards became substantially limited in their annual availability. Management currently believes that the remaining $219.3 million in federal net operating loss carryforwards, and the $173.7 million in state net operating loss carryforwards, are unrestricted.

As of December 31, 2015, CytRx also had research and development and alternative minimum tax credits for federal and state purposes of approximately $14.8 million and $19.5 million, respectively, available for offset against future income taxes, which expire in 2022 through 2035. Based on an assessment of all available evidence including, but not limited to, the Company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the Company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a 100% deferred tax valuation allowance has been recorded against these assets.

Deferred income taxes reflect the net effect of temporary differences between the financial reporting carrying amounts of assets and liabilities and income tax carrying amounts of assets and liabilities. The components of the Company’s deferred tax assets and liabilities, all of which are long-term, are as follows (in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	105,661		$	86,541
Tax credit carryforwards		27,671			22,716
Equipment, furnishings and other		10,547			14,396
Total deferred tax assets		143,879			123,653
Deferred tax liabilities		(270	)		(187	)
Net deferred tax assets		143,609			123,466
Valuation allowance		(143,609	)		(123,466	)
	$	—		$	—

For all years presented, the Company did not recognize any deferred tax assets or liabilities. The net change in valuation allowance for the years ended December 31, 2015 and 2014 was $20.1 million and $23.4 million, respectively.

The provision for income taxes differs from the provision computed by applying the Federal statutory rate to net loss before income taxes as follows (in thousands):

	Years ended December 31,
	2015			2014			2013
Federal benefit at statutory rate	$	(19,919	)	$	(10,240	)	$	(16,145	)
State income taxes, net of Federal taxes		(3,556	)		(2,773	)		(1,517	)
State credits		(1,324	)		(990	)		(787	)
Warrant liabilities		(1,509	)		(6,477	)		6,871
Other permanent differences		16			37			14
Provision related to change in valuation allowance		20,142			23,440			14,606
Current year tax credit		(2,050	)		(1,300	)		(1,034	)
Return to provision		8,198			(1,504	)		(2,011	)
Other, net		3			(192	)		5
	$	1		$	1		$	2

There have been no changes to the Company’s liability for unrecognized tax benefits during the year ended December 31, 2015.

The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. As of the year ended December 31, 2015, the tax returns for 2011 through 2015 remain open to examination by the Internal Revenue Service and various state tax authorities.

The Company’s policy is to recognize any interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of the years ended December 31, 2015, 2014 and 2013, the Company had accrued no interest or penalties related to uncertain tax positions.