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INCOME TAXES

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

NOTE 6.

INCOME TAXES

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

For financial reporting purposes, income before income taxes were (dollars in thousands):

		Years Ended December 31,
		2020				2019				2018
Income before income taxes		$	5,334			$	5,223			$	10,393

The expense for income taxes consists of (dollars in thousands):

		Years Ended December 31,
		2020				2019				2018
Current:
Federal		$	1,120			$	1,078			$	1,391

Deferred and Other:
Federal			—				—				792
Total Tax Expense		$	1,120			$	1,078			$	2,183

The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory rate is as follows (dollars in thousands):

		Years Ended December 31,
		2020				2019				2018
Income Tax Expense at Federal Statutory Rate		$	1,120			$	1,078			$	2,183
Repricing of Deferred Assets Due to Change in Future Rates			—				—				—
Reported Income Tax Expense		$	1,120			$	1,078			$	2,183
Effective Tax Rate			21	%			21	%			21	%

The company is subject to taxation in the United States and various states. As of December 31, 2020, the Company’s tax years for 2019, 2018, and 2017 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2020, the Company is no longer subject to U.S federal, state, or local examinations by tax authorities for the years ended before 2016.

Due to changes in Tax Law the Company's AMT tax credit became refundable in 2018. The Company received an $89.7 thousand payment in 2019, $44.9 thousand in 2020 and will receive $44.9 thousand in 2021. In accordance with the Company's tax sharing agreement the AMT receivable has been assigned to the Company's parent (TCI).