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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | 6. INCOME TAXES A reconciliation of the U.S. federal statutory tax rate to our income tax (expense) benefit for 2019, 2018 and 2017, is as follows (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |
U.S. statutory rate |  | $ | 10,393 |  |  |  | 21.0 | % |  | $ | 4,159 |  |  |  | 21.0 | % |  | $ | 24,136 |  |  |  | 35.0 | %
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent differences |  |  | (85 | ) |  |  | (0.2 | )% |  |  | (206 | ) |  |  | (1.0 | )% |  |  | (330 | ) |  |  | 0.5 | %
State income taxes |  |  | 173 |  |  |  | 0.4 | % |  |  | (571 | ) |  |  | (2.9 | )% |  |  | 366 |  |  |  | (0.5 | )%
Other |  |  | (13 | ) |  |  | — |  |  |  | 374 |  |  |  | 1.9 | % |  |  | (118 | ) |  |  | 0.2 | %
Discrete items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vesting of common stock |  |  | 13 |  |  |  | — |  |  |  | (19 | ) |  |  | (0.1 | )% |  |  | (253 | ) |  |  | 0.4 | %
Change in valuation allowance |  |  | (10,385 | ) |  |  | (21.0 | )% |  |  | (4,308 | ) |  |  | (21.7 | )% |  |  | 392 |  |  |  | (0.5 | )%
Income tax (expense) benefit |  | $ | 96 |  |  |  | 0.2 | % |  | $ | (571 | ) |  |  | (2.8 | )% |  | $ | 24,193 |  |  |  | 35.1 | %
Income Tax (Expense) Benefit - Significant components of our income tax (expense) benefit for 2019, 2018 and 2017, were as follows (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | 86 |  |  |  | (317 | ) |  |  | (83 | )
Total current |  |  | 86 |  |  |  | (317 | ) |  |  | (83 | )
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 10,308 |  |  |  | 3,410 |  |  |  | 24,219 |
State |  |  | 87 |  |  |  | 644 |  |  |  | 449 |
Valuation allowance |  |  | (10,385 | ) |  |  | (4,308 | ) |  |  | (392 | )
Total deferred |  |  | 10 |  |  |  | (254 | ) |  |  | 24,276 |
Income tax (expense) benefit |  | $ | 96 |  |  | $ | (571 | ) |  | $ | 24,193 |
Deferred Taxes - Significant components of our deferred tax assets and liabilities at December 31, 2019 and 2018, were as follows (in thousands):
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets |  |  |  |  |  |  |  |
Impairments of intangible assets and inventory |  | $ | 644 |  |  | $ | 1,217 |
Employee benefits |  |  | 724 |  |  |  | 758 |
Accrued losses on uncompleted contracts |  |  | 3,335 |  |  |  | 2,380 |
Stock based compensation expense |  |  | 312 |  |  |  | 266 |
Allowance for doubtful accounts |  |  | 11 |  |  |  | 84 |
Long-term incentive awards |  |  | - |  |  |  | 150 |
Federal net operating losses |  |  | 14,885 |  |  |  | 9,962 |
State net operating losses |  |  | 1,678 |  |  |  | 1,155 |
R&D and other tax credits |  |  | 806 |  |  |  | - |
Other |  |  | 426 |  |  |  | 395 |
Total deferred tax assets |  |  | 22,821 |  |  |  | 16,367 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Property, plant and equipment and AHFS |  |  | (7,523 | ) |  |  | (11,416 | )
Prepaid insurance |  |  | (402 | ) |  |  | (450 | )
Total deferred tax liabilities |  |  | (7,925 | ) |  |  | (11,866 | )
Net deferred tax assets |  |  | 14,896 |  |  |  | 4,501 |
Valuation allowance |  |  | (15,086 | ) |  |  | (4,701 | )
Net deferred taxes (1) |  | $ | (190 | ) |  | $ | (200 | )
| (1) | Amounts are included in other noncurrent liabilities on our Balance Sheet.
At December 31, 2019 and 2018, we had total DTAs of $22.8 million and $16.4 million, respectively (including U.S. federal net operating loss(es) ("NOL(s)") DTAs of $14.9 million and $10.0 million, respectively). On a periodic and ongoing basis we evaluate our DTAs (including our NOL DTAs) and assess the appropriateness of our valuation allowance(s) ("VA(s)"). In assessing the need for a VA, we consider both positive and negative evidence related to the likelihood of realizing our DTAs. If, based upon the available evidence, our assessment indicates that it is more likely than not that some or all of the DTAs will not be realized, we record a VA. Our assessments include, among other things, the amount of taxable temporary differences that will result in future taxable income, the value and quality of our backlog, evaluations of existing and anticipated market conditions, analysis of recent and historical operating results (including cumulative losses over multiple periods) and projections of future results and strategic plans, as well as asset expiration dates. As a result of our assessment and due to cumulative losses for the three years ended December 31, 2019, we believe the negative evidence outweighs the positive evidence with respect to our ability to realize our U.S. federal NOL DTAs, and accordingly, at December 31, 2019 and 2018, we had VAs of $15.1 million and $4.7 million, respectively, offsetting our total DTAs. At December 31, 2019, we had gross U.S. federal NOL carryforwards (excluding VAs) of $70.9 million, of which $42.3 million will expire in 2037 with the remaining U.S. federal NOL carryforwards eligible to be carried forward indefinitely, subject to an 80% limitation on taxable income in each year. We had gross state NOL carryforwards (excluding VAs) of $65.1 million, which will expire from 2035 through 2039. Uncertain Tax Positions - Reserves for uncertain tax positions are recognized when we consider it more likely than not that additional tax will be due in excess of amounts reflected in our income tax returns, irrespective of whether or not we have received tax assessments. Interest and penalties on uncertain tax positions are recorded within income tax expense. Tax returns subject to examination by the U.S. Internal Revenue Service are open for years 2015 and after. At December 31, 2019 and 2018, we had no material reserves for uncertain tax positions. Tax Cuts and Jobs Act - In December 2017, the Tax Cuts and Jobs Act was signed into law which, among other things, reduced the U.S. federal corporate income tax rate from a maximum of 35.0% to 21.0% (effective January 1, 2018).

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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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