Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 10: Income Taxes

The income tax benefit attributable to continuing operations during the years ended December 31, 2022, 2021 and 2020 is as follows:

Components of the benefit from income taxes are as follows:

For the years ended December 31,	2022			2021			2020
(dollars in thousands)
Current provision (benefit)
Federal	$	(1	)	$	-		$	(16	)
State		5			5			-
Deferred benefit
Federal		(2,566	)		(3,376	)		(5,154	)
State		(62	)		88			(77	)
Benefit from income taxes	$	(2,624	)	$	(3,283	)	$	(5,247	)

The income tax benefit reconciled to taxes computed at the statutory federal rate is as follows:

For the years ended December 31,		2022				2021				2020
Tax benefit at statutory tax rate	$		(2,246	)	$		(848	)	$		(5,102	)
State income taxes, net of federal tax benefit			(53	)			(153	)			(129	)
Research and development tax credit			(557	)			(814	)			(372	)
Valuation allowance			(19	)			-				-
PPP loan forgiveness			-				(2,100	)			-
Deferred tax adjustment for stock option forfeitures			-				371				234
Other adjustments to deferred taxes			213				230				45
Other			38				31				77
Benefit from income taxes	$		(2,624	)	$		(3,283	)	$		(5,247	)

We continue to record a full valuation allowance against our New York deferred tax assets due to the zero percent state income tax rate for qualified manufacturers. We continue to record a partial valuation allowance against our Pennsylvania net operating loss deferred tax asset due to annual usage limitations. We have determined that federal and other state deferred tax assets are expected to be realized and have not recorded any additional valuation allowances.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our net deferred taxes related to continuing operations are as follows:

December 31,	2022		2021
(dollars in thousands)
Noncurrent deferred income taxes:
Federal and state tax carryforwards	$	12,863	$	13,358
Inventory		960		1,310
Share-based compensation		1,592		1,745
Receivables		43		51
Accrued liabilities		147		168
Other		1,930		4
Total deferred tax assets	$	17,535	$	16,636
Deferred tax liabilities:
Property, plant and equipment	$	16,852	$	18,459
Other		540		638
Total deferred tax liabilities	$	17,392	$	19,097
Total noncurrent deferred income taxes assets (liabilities)	$	143	$	(2,461	)

We file a U.S. federal income tax return and various state income tax returns. For federal income tax purposes, we had $25.8 million and $29.2 million of net operating loss carryforwards at December 31, 2022 and 2021, respectively. The net operating loss carryforwards begin to expire in 2035. In addition, we have credit carryforwards associated with our research and development activities of $7.0 million and $6.4 million as of December 31, 2022 and 2021, respectively. The research and development credit carryforwards begin to expire in 2030.

We have state net operating loss carryforwards of $11.0 million at December 31, 2022 and $11.1 million at December 31, 2021, and the related valuation allowances were approximately $0.2 million at each date. We also have state credit carryforwards of $0.4 million at December 31, 2022 and December 31, 2021. The state net operating loss carryforwards begin to expire in 2031. The state credit carryforwards begin to expire in 2027.

We are routinely under audit by federal or state authorities. Our federal tax returns are subject to examination by the IRS for tax years after 2018. We are subject to examination by most state tax jurisdictions for tax years after 2018.