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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes |
Income Taxes | (15) Income Taxes The components of income tax benefit (provision) are as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
|  | (In thousands)
Income Tax Benefit (Provision): |  |  |  |  |  |  |  |  |
Federal |  | $ | 13,869 |  | $ | 22,255 |  | $ | 57,547
State |  |  | 2,170 |  |  | 6,406 |  |  | (2,479)
Foreign |  |  | — |  |  | 913 |  |  | 2,448
Expiration of NOLs and R&D Credit |  |  | (18,966) |  |  | — |  |  | —
Income Tax Rate Change |  |  | — |  |  | — |  |  | (99,528)
|  |  | (2,927) |  |  | 29,574 |  |  | (42,012)
Deferred Tax Valuation Allowance |  |  | 2,927 |  |  | (28,809) |  |  | 66,294
|  | $ | — |  | $ | 765 |  | $ | 24,282
A reconciliation between the amount of reported income tax and the amount computed using the U.S. Statutory rate is as follows:
|  | 2019 |  | 2018 |  | 2017
|  | (In thousands)
Pre-Tax Loss |  | $ | (50,878) |  | $ | (151,949) |  | $ | (117,313)
Loss at Statutory Rates |  |  | (10,684) |  |  | (31,909) |  |  | (39,887)
Difference in Foreign Tax Rates |  |  | — |  |  | — |  |  | 326
Research and Development Credits |  |  | (1,902) |  |  | (2,056) |  |  | (2,847)
State Taxes |  |  | (2,170) |  |  | (6,406) |  |  | (6,283)
Income Tax Rate Change |  |  | — |  |  | — |  |  | 99,528
Other |  |  | (1,011) |  |  | (1,175) |  |  | (321)
Change in Fair Value Remeasurement of Contingent Consideration |  |  | (272) |  |  | (6,220) |  |  | —
Intangible Impairment |  |  | — |  |  | 19,105 |  |  | —
Recognition of APIC NOLs |  |  | — |  |  | — |  |  | (5,729)
Impact of Pass-through Entities |  |  | — |  |  | (913) |  |  | (2,775)
Expiration of NOLs and R&D Credit |  |  | 18,966 |  |  | — |  |  | —
Change in Valuation Allowance |  |  | (2,927) |  |  | 28,809 |  |  | (66,294)
Income Tax (Benefit) Provision |  | $ | — |  | $ | (765) |  | $ | (24,282)
Deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future expected enacted rates. The principal components of the deferred tax assets and liabilities at December 31, 2019 and 2018, respectively, are as follows:
|  | December 31, |  | December 31,
|  | 2019 |  | 2018
|  | (In thousands)
Gross Deferred Tax Assets |  |  |  |  |  |
Net Operating Loss Carryforwards |  | $ | 172,745 |  | $ | 168,239
Foreign Net Operating Loss Carryforwards |  |  | — |  |  | 4,485
Tax Credit Carryforwards |  |  | 42,642 |  |  | 39,761
Deferred Research and Development Expenses |  |  | 70,042 |  |  | 76,555
Stock-based Compensation |  |  | 12,651 |  |  | 11,977
Fixed Assets |  |  | 1,759 |  |  | 1,761
Accrued Expenses and Other |  |  | 328 |  |  | 316
|  |  | 300,167 |  |  | 303,094
Gross Deferred Tax Liabilities |  |  |  |  |  |
IPR&D Intangibles |  |  | (12,748) |  |  | (12,748)
Total Deferred Tax Assets and Liabilities |  |  | 287,419 |  |  | 290,346
Valuation Allowance |  |  | (290,426) |  |  | (293,353)
Net Deferred Tax Liability |  | $ | (3,007) |  | $ | (3,007)
The Company has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets and considered its history of losses, ultimately concluding that it is “more likely than not” that the Company will not recognize the benefits of federal, state and foreign deferred tax assets and, as such, has maintained a full valuation allowance on its deferred tax assets. During year ended December 31, 2017, the Company’s gross deferred tax assets and corresponding valuation allowance each increased by $17.7 million. This was a one-time increase due to the adoption of a new accounting standard removing the requirement to recognize excess tax benefits from the exercise of stock options in additional paid-in-capital when realized. On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted, leading to significant changes to U.S. tax law. Among other provisions, the TCJA lowered the U.S. federal corporate income tax rate from 35% to 21%, limited the deduction for net operating losses to 80% of taxable income while providing that net operating loss carryovers for years after 2017 will not expire, imposed a mandatory one-time transition tax on previously deferred foreign earnings and eliminated or reduced certain income tax deductions. As a result of the TCJA, the Company revalued its deferred tax liabilities at the new federal rate of 21%, resulting in a $6.9 million decrease and a corresponding income tax benefit. The Company also scheduled out reversals of its deferred tax assets and liabilities, determining that their reversal would create future indefinite‑lived net operating losses under the TCJA. As such, the valuation allowance was reduced relating to the remaining indefinite‑lived federal deferred tax liabilities balance, leading to an additional income tax benefit of $12.2 million. The Company’s deferred tax asset balance was also revalued at the new 21% rate resulting in a $99.5 million decrease in the balance with a corresponding decrease to the valuation allowance. The Company’s accounting for the tax effects of the TCJA was complete as of December 31, 2018. The net deferred tax liability of $3.0 million at December 31, 2019 and 2018 relates to the temporary differences associated with the IPR&D intangible assets acquired in previous business combinations and are not deductible for tax purposes. The Company recorded an income tax benefit of $0.8 million during the year ended December 31, 2018 due to a decrease in deferred tax liabilities resulting from the partial impairment of the anti-KIT program. As of December 31, 2019, the Company had federal and state net operating loss carryforwards of $638.9 million and $595.1 million, respectively, which may be available to offset certain future income tax liabilities and begin to expire in 2019 and 2028, respectively. Of the federal net operating loss carryforwards of $638.9 million, approximately $146.0 million are from 2018 and 2019 and have no expiration date. As of December 31, 2019, the Company also had federal and state research and development tax credit carryforwards of $33.4 million and $11.7 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2019 and 2018, respectively. Utilization of the net operating loss carryforwards and research and credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, or Section 382, due to ownership changes that occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three‑year period. The Company has estimated the amounts of net operating loss and research and development tax credit carryforwards which will expire unutilized as a result of its estimated annual limitations under Section 382 and has excluded those amounts from the carryforward amounts disclosed above and in the deferred tax assets and liabilities table included in this footnote. The Company has concluded Section 382 studies through 2015 for Celldex generated NOLs. The Company incurred a foreign pre-tax loss of $0.0 million and $3.0 million during the years ended December 31, 2019 and 2018, respectively. Beginning with the 2016 tax returns, the Company elected to classify the Australian entity as a disregarded entity for income tax purposes. The foreign pre-tax losses have been included with the Federal net operating loss carryforwards. In 2019 the Australian Subsidiary was liquidated and $14.9 million of Foreign Net Operating Loss Carryovers related to the foreign subsidiary were written off. As of December 31, 2019 and 2018, the Company did not have any unrecognized tax benefits. Massachusetts, New Jersey, New York and Connecticut are the jurisdictions in which the Company primarily operates or has operated and has income tax nexus. The Company is not currently under examination by these or any other jurisdictions for any tax year. Generally, in U.S. federal and state taxing jurisdictions, all years which generated net operating losses and/or tax credit carryforwards remain subject to examination to the extent those carryforwards are utilized in a subsequent period.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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