Provision for Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes |
NOTE 10. PROVISION FOR INCOME TAXES The components of the Company’s loss before the provision for income taxes consisted of the following:
The provision for income taxes consisted of the following for the years ended December 31, 2020 and 2019:
A reconciliation of the statutory U.S. federal income tax rate to the Company's effective tax rate for the years ended December 31, 2020 and 2019 is as follows:
The significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2020 and 2019 were as follows:
The Company has evaluated the available positive and negative evidence supporting the realization of its gross deferred tax assets, including its cumulative losses, and the amount and timing of future taxable income, and has determined it is more likely than not that the assets will not be realized. Accordingly, the Company recorded a full valuation allowance as of December 31, 2020 and 2019 against its U.S. federal and state deferred tax assets as of December 31, 2020 and 2019. The change in the valuation allowance for the years ended December 31, 2020 and 2019 is as follows:
As of December 31, 2020, the Company has federal and state income tax net operating loss carryforwards of approximately $186,324 and $87,251, respectively. The U.S. federal and state net operating losses are projected to expire in 2034 and 2021, respectively, unless previously utilized. Net operating loss carryforwards generated after January 1, 2018 may be carried forward indefinitely, subject to the 80% taxable income limitation on the utilization of the carryforwards. In addition, the Company had federal and state research and development credit carryforwards of approximately $2,421 and $1,807, respectively, as of December 31, 2020. The federal research and development credit will begin to expire in 2036 if unused and the state research and expenditure credit may be carried forward indefinitely. Certain tax attributes may be subject to an annual limitation in the event there has been or is a change of ownership as defined under Internal Revenue Code Section 382.
At December 31, 2020 and 2019, the Company had approximately $720 and $0, respectively, of unrecognized tax benefits all of which would impact the Company’s effective tax rate if recognized. If recognized, $655 would result in a deferred tax asset for tax attribute carryforwards, which is expected to require a full valuation allowance based on present circumstances. The Company estimates that none of its unrecognized tax benefits will decrease in the next twelve months. The Company is subject to taxation in the United States and various states. Certain U.S. federal tax returns and state tax returns are open for examination for tax years 2016 and forward. The Company is not currently under examination from income tax authorities in the jurisdictions in which the Company does business. On March 27, 2020, the U.S federal government enacted the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). The CARES Act is an emergency economic stimulus package in response to the coronavirus outbreak which, among other things, contains numerous income tax provisions. Some of these tax provisions are effective retroactively for years ended before the date of the enactment. The provisions of the CARES Act did not materially impact the Company's tax position. |