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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Components of income tax expense (benefit) are as follows:
(In thousands) | December 31, 2021 |  | December 31, 2020 |  |
Current: |  |  |  |  |
Federal | $ | 217 |  |  | $ | (3,682) |  |  |
State | 54 |  |  | (120) |  |  |
Foreign | 109 |  |  | (37) |  |  |
| 380 |  |  | (3,839) |  |  |
Release of valuation allowance due to CARES Act | — |  |  | (3,664) |  |  |
| 380 |  |  | (7,503) |  |  |
Deferred: |  |  |  |  |
Federal | (2,518) |  |  | (25) |  |  |
State | (613) |  |  | (1,004) |  |  |
| (3,131) |  |  | (1,029) |  |  |
Valuation allowance | 3,131 |  |  | 1,029 |  |  |
Total income tax expense (benefit) | $ | 380 |  |  | $ | (7,503) |  |  |
Below is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate:
| Year Ended December 31,
| 2021 |  | 2020 |  |
Federal tax provision | 21.0 | % |  | 21.0 | % |  |
State taxes (net of federal benefit) | 3.8 | % |  | 5.1 | % |  |
Valuation allowance | (21.1) | % |  | (5.3) | % |  |
Incentive stock compensation expense | (1.8) | % |  | (1.7) | % |  |
Section 162(m) compensation | (3.8) | % |  | — | % |  |
GILTI | (1.2) | % |  | — | % |  |
NOL carryback from CARES Act | — | % |  | 18.9 | % |  |
Other | 0.5 | % |  | 0.7 | % |  |
Total | (2.6) | % |  | 38.7 | % |  |
Major components of the Company’s deferred tax assets (liabilities) are as follows:
(In thousands) | December 31, 2021 |  | December 31, 2020 |  |
Deferred tax assets: |  |  |  |  |
Loss and credit carryforwards | $ | 4,256 |  |  | $ | 1,888 |  |  |
Stock-based compensation | 1,701 |  |  | 1,603 |  |  |
Accrued bonus | 555 |  |  | — |  |  |
Other | 886 |  |  | 745 |  |  |
Total deferred tax assets | 7,398 |  |  | 4,236 |  |  |
Valuation allowance | (6,968) |  |  | (3,837) |  |  |
Total deferred tax assets, net of valuation allowance | 430 |  |  | 399 |  |  |
Deferred tax liabilities: |  |  |  |  |
Property and equipment | (205) |  |  | (278) |  |  |
Other | (225) |  |  | (121) |  |  |
Total deferred tax liabilities | (430) |  |  | (399) |  |  |
Net deferred tax assets | $ | — |  |  | $ | — |  |  |
On March 27, 2020, the U.S. government enacted the CARES Act to provide relief from COVID-19. The CARES Act includes a provision that allows companies to carryback net operating losses (NOL’s) generated in the period 2018 through 2020 to prior years. In conjunction with the disposition of the Core business in 2018, the Company generated a significant amount of taxable income in 2018. Subsequent to this, the Company generated NOLs in 2019 and 2020. For the NOLs generated in 2019, the Company previously recorded a full valuation allowance on the deferred tax assets associated with the NOL due to realization not being probable under then existing tax law. The CARES Act makes these assets realizable and, as of the date of the CARES Act, the Company recognized an income tax benefit of approximately $3.7 million associated with the release of the valuation allowance on its Federal NOL deferred tax asset from 2019. Additionally, using the provisions of the CARES Act, the Company carried back its 2020 Federal NOL of approximately $3.7 million. The Company considers all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. The Company considers the earnings of Apyx Bulgaria, EOOD to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. It has not recorded a deferred tax liability related to the U.S. Federal and State income taxes and foreign withholding taxes on the undistributed earnings of Apyx Bulgaria, EOOD indefinitely invested outside the United States. If it decides to repatriate the foreign earnings, the Company will need to adjust its income tax provision in the period it determines that the earnings will no longer be indefinitely invested outside the United States. The Company assesses the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As of December 31, 2021 and 2020, the Company has recorded a liability of approximately $1.3 million related to uncertain tax positions and accrued approximately $0.6 million and $0.4 million, respectively, of interest and penalties on these positions. All unrecognized tax benefits are expected to be resolved within the next 12 months. The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31:
(in thousands) |  | Gross Unrealized Tax Benefits
|  | 2021 |  | 2020
Beginning of year balance |  | $ | 1,313 |  |  | $ | 1,313 |
Additions of tax positions related to the current year |  | — |  |  | — |
Additions of tax positions related to the prior year |  | — |  |  | — |
Decreases for tax positions related to prior year |  | — |  |  | — |
End of year balance |  | $ | 1,313 |  |  | $ | 1,313 |
The Company is subject to U.S. federal and state income tax examination. The Company’s 2018 through 2020 U.S. federal income tax returns are subject to examination by the Internal Revenue Service. The Company’s state income tax returns are subject to examination for the 2017 through 2020 tax years.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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