9. Taxes on Income

The components of income tax expense are as follows:

In thousands	2019		2018
Current:
Federal	$	-	$	-
State and local		25		25
Foreign		16		22
	$	41	$	47
Deferred:
Federal	$	-	$	-
State and local		-		-
		-		-
Income tax expense	$	41	$	47

Loss before income taxes from the United States operations was $1.2 million and $4.5 million for the years ended December 31, 2019 and 2018, respectively. Loss before income taxes from Canada was $0.2 million and $0.1 million for the years ended December 31, 2019 and 2018, respectively.

The effective income tax rate differed from the expected federal statutory income tax benefit rate of 21.0% as follows:

	2019		2018
Statutory federal income tax benefit rate	21.0	%	21.0	%
State income taxes, net of federal benefit	2.5		4.2
Deemed dividend tax of deferred foreign income	-		0.5
Foreign income taxed at different rates	(3.6)		(1.1)
Deferred tax asset valuation allowance	285.5		(22.6)
Section 382 adjustment to deferred net operating loss	(309.3)		-
Other	0.9		(3.0)
Effective income tax benefit (expense) rate	(3.0)	%	(1.0)	%

Deferred income taxes reflect the net effect 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 the Company’s deferred income tax assets and liabilities are as follows:

In thousands	2019		2018
Deferred income tax asset:
Tax credit carryforwards	$	-	$	30
Operating loss carryforwards		1,487		5,347
Net pension costs		2,210		2,357
Accruals		-		(3)
Allowance for bad debts		182		467
Other		148		302
Valuation allowance		(3,563)		(7,447)
		464		1,053
Deferred income tax liability:
Depreciation		345		425
Other		119		628
		464		1,053
Net deferred income taxes	$	-	$	-

Operating tax loss carryforwards primarily relate to U.S. federal net operating loss carryforwards of approximately $4.9 million, which began to expire in 2019. The operating loss carryforwards have been limited by changes in ownership of the Company in 2012 and 2019 as defined under Section 382 of the Internal Revenue Code. The change in ownership as of June 26, 2012 limited our operating loss carryforwards at that time to $295,000 per year aggregating $5.9 million. The change in ownership as of April 10, 2019 limited our operating loss carryforwards at that time to $148,000 per year aggregating $3.0 million. Subsequent losses in 2019 have increased the operating loss carryforwards.

A valuation allowance has been established for the amount of deferred income tax assets as management has concluded that it is more-likely-than-not that the benefits from such assets will not be realized.

The Company’s determinations regarding uncertain income tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. The Company does not have any material uncertain tax positions in 2019 and 2018.

The Company is subject to U.S. federal income tax as well as income tax in multiple state and local jurisdictions and Canadian federal and provincial income tax. Currently, no federal, state or provincial income tax returns are under examination.