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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes [Abstract] |
Income Taxes |
12. | Income Taxes
Loss before income taxes was distributed geographically for the years ended December 31, as follows (in thousands):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Domestic |  | $ | (4,459 | ) |  | $ | (7,783 | ) |  | $ | (13,993 | )
Foreign |  |  | (823 | ) |  |  | 41 |  |  |  | (228 | )
Total |  | $ | (5,282 | ) |  | $ | (7,742 | ) |  | $ | (14,221 | )
The provision for income taxes is as follows for the years ended December 31 (in thousands):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |  |  | $ | - |
State |  |  | 2 |  |  |  | 2 |  |  |  | 3 |
Foreign |  |  | 365 |  |  |  | 91 |  |  |  | 10 |
Change in deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,604 | ) |  |  | (2,466 | ) |  |  | (4,213 | )
Federal valuation allowance |  |  | 1,604 |  |  |  | 2,466 |  |  |  | 4,213 |
State |  |  | (197 | ) |  |  | (252 | ) |  |  | (460 | )
State valuation allowance |  |  | 197 |  |  |  | 252 |  |  |  | 460 |
Foreign |  |  | (161 | ) |  |  | 6 |  |  |  | 64 |
Foreign valuation allowance |  |  | 161 |  |  |  | (6 | ) |  |  | (64 | )
Total current |  | $ | 367 |  |  | $ | 93 |  |  | $ | 13 |
The differences between our effective income tax rate and the U.S. federal statutory federal income tax rate for the years ended December 31, are:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Amounts at statutory tax rates |  |  | 34 | % |  |  | 34 | % |  |  | 34 | %
Foreign losses taxed at different rates |  |  | (3 | )% |  |  | - |  |  |  | (1 | )%
Foreign withholding tax |  |  | (4 | )% |  |  | - |  |  |  | - |
Stock-based compensation |  |  | - |  |  |  | (1 | )% |  |  | (2 | )%
Other |  |  | - |  |  |  | (1 | )% |  |  | (1 | )%
Total |  |  | 27 | % |  |  | 32 | % |  |  | 30 | %
Valuation allowance |  |  | (35 | )% |  |  | (33 | )% |  |  | (31 | )%
Effective tax rate |  |  | (8 | )% |  |  | (1 | )% |  |  | (1 | )%
Significant components of the deferred tax asset balances at December 31 are as follows (in thousands):
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |
Accruals |  | $ | 126 |  |  | $ | 1,109 |
Stock compensation |  |  | 1,466 |  |  |  | 1,352 |
Net operating losses |  |  | 20,015 |  |  |  | 17,190 |
Basis difference in fixed assets |  |  | 13 |  |  |  | 7 |
Total deferred tax assets |  | $ | 21,620 |  |  | $ | 19,658 |
Valuation allowance |  |  | (21,620 | ) |  |  | (19,658 | )
Total net deferred tax assets |  | $ | - |  |  | $ | - |
Valuation allowances are recorded to offset certain deferred tax assets due to management’s uncertainty of realizing the benefits of these items. Management applies a full valuation allowance for the accumulated losses of Neonode Inc., and its subsidiaries, since it is not determinable using the “more likely than not” criteria that there will be any future benefit of our deferred tax assets. This is mainly due to our history of operating losses. As of December 31, 2016, we had federal, state and foreign net operating losses of $56.0 million, $22.3 million and $0.5 million, respectively. The federal loss carryforward begins to expire in 2028, the California loss carryforward begins to expire in 2030 and the foreign loss carryforward is indefinite. Utilization of the net operating loss and tax credit carryforwards is subject to an annual limitation due to the ownership percentage change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of the net operating losses and tax credit carryforwards before utilization. As of December 31, 2016, we had not completed the determination of the amount to be limited under the provision. As of December 31, 2016, we did not recognize $547,000 and $28,000 of federal and state deferred tax assets relating to excess tax benefits for stock-based compensation deductions. Unrecognized deferred tax benefits will be accounted for as a credit to additional paid-in capital when realized through a reduction in income taxes payable. We follow the provisions of accounting guidance which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. There were no unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014. We follow the policy to classify accrued interest and penalties as part of the accrued tax liability in the provision for income taxes. For the years ended December 31, 2016, 2015 and 2014 we did not recognize any interest or penalties related to unrecognized tax benefits. Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2016 and 2015, we had no accrued interest and penalties related to uncertain tax matters. As of December 31, 2016, we had no uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. We file income tax returns in the U.S. federal jurisdiction, California, Sweden, Japan, South Korea and Taiwan. The 2008 through 2015 tax years are open and may be subject to potential examination in one or more jurisdictions. We are not currently under any federal, state or foreign income tax examinations.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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