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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of income tax expense for the years ended December 31, 2021 and 2020, are as follows:
In thousands20212020
Federal:  
Current$6,189 $4,672 
Deferred24 (1,121)
6,213 3,551 
State:  
Current949 805 
Deferred23 (48)
972 757 
$7,185 $4,308 
Reconciliations of the statutory federal income tax to the income tax expense reported in the consolidated statements of income for the years ended December 31, 2021 and 2020, are as follows:
 Percentage of Income
before Income Taxes
 20212020
Federal income tax at statutory rate21.0 %21.0 %
State income taxes, net of federal benefit2.2 %2.6 %
Tax-exempt income(1.1)%(2.0)%
Earnings on investment in bank-owned life insurance(0.9)%(1.3)%
Rehabilitation and low-income housing credits(0.8)%(1.1)%
Reduction of federal tax rate— %— %
Other0.1 %(0.1)%
20.5 %19.1 %
Rehabilitation and low-income housing income tax credits were $281,000 and $259,000, during 2021 and 2020, respectively.
Components of deferred tax assets and liabilities at December 31 were as follows:
In thousands20212020
Deferred tax assets:  
Allowance for loan losses$4,336 $4,367 
Available for sale securities1,017 — 
Accrued deferred compensation1,126 1,053 
Pension1,714 2,939 
Deferred loan fees203 634 
Other-than-temporary impairment43 43 
Nonaccrual interest590 359 
Deferred director fees844 766 
Acquisition accounting(1,112)(501)
Other1,719 1,747 
10,480 11,407 
Deferred tax liabilities:  
Deferred loan fees— — 
Available for sale securities— 1,328 
Prepaid pension benefit cost4,148 4,207 
Prepaid expenses131 130 
Accumulated depreciation354 555 
Goodwill/intangibles1,333 1,259 
5,966 7,479 
Net Deferred Tax Asset included in Other Assets$4,514 $3,928 
The Corporation did not have any uncertain tax positions at December 31, 2021 and 2020. The Corporation’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income.
Years that remain open for potential review by the Internal Revenue Service are 2017 through 2020.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal Revenue Code. The changes include, but are not limited to: increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income.
The tax law changes in the CARES Act did not have a material impact on the Corporation’s income tax provision.