We account for income taxes under ASC 740, Income Taxes. The following table reflects income and loss from continuing operations by location, and the provision for income taxes for the applicable fiscal years ended March 31:

The components of the income tax (benefit) provision consist of the following for the fiscal years ended March 31:

On March 27, 2020, the U.S. federal government passed the CARES Act. Under the CARES Act, Alternative Minimum Tax, or AMT, credit refunds are accelerated and fully refundable in tax returns through the year 2019. As a result of this provision, the Company recovered all its final AMT credits as refunds in fiscal 2021.

Our fiscal 2022 and 2021 taxes were measured at the U.S. statutory income tax rate of 21%. For the year ended March 31, 2022, the Company's tax benefit was driven by lower taxable income and changes in the state net operating losses and valuation allowance. A reconciliation between income taxes computed at the U.S. federal statutory rate to the actual tax expense for income taxes reported in the Consolidated Statements of Operations and Comprehensive (Loss) Income follows for fiscal years ended March 31:

*Effective tax rate is calculated by dividing the income tax provision by (loss) income before income taxes.

The following table summarizes the components of deferred income tax assets and liabilities at March 31:


	2022		2021
Deferred tax assets:
Net operating loss carryforward	$	6,099,169	$	3,571,600
Compensation		191,976		347,742
Stock based compensation awards		234,752		238,120
Other items not currently deductible		322,463		189,728
Depreciation		—		38,490
Total deferred tax assets		6,848,360		4,385,680
Valuation allowance		(1,953,609)		(1,731,100)
Net deferred tax assets		4,894,751		2,654,580
Deferred tax liabilities:
Depreciation		(2,259,094)		—
Contract accounting methods		(508,887)		(720,165)
Total deferred tax liabilities		(2,767,981)		(720,165)
Deferred taxes, net	$	2,126,770	$	1,934,415

In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of the remaining deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdictions, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase or a reduction the valuation allowance currently recorded against those deferred tax assets.

The valuation allowance on deferred tax assets was approximately $2.0 million at March 31, 2022. We believe that it is more likely than not that the benefit from certain NOL carryforwards and other deferred tax assets will not be realized. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, the Company could be required to increase or decrease the valuation allowance for those deferred tax assets.

The following table summarizes carryforwards of net operating losses as of March 31, 2022:


			Begins to
	Amount		Expire:
Federal net operating losses	$	17,140,365	2026
State net operating losses	$	37,391,264	2032

The Internal Revenue Code provides for a limitation on the annual use of net operating loss carryforwards following certain ownership changes that could limit our ability to utilize these carryforwards on a yearly basis.

We experienced an ownership change in connection with the acquisition of Ranor in 2006. Accordingly, our ability to utilize certain carryforwards relating to 2006 and prior is limited. Our remaining pre-2006 net operating losses total approximately $0.4 million.As of March 31, 2022, we have approximately $6.9 million of federal post-2006 losses available for carryforward, without limitation. U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, we may not be able to take full advantage of these carryforwards for Federal or state income tax purposes.

Certain pre-2021 Stadco net operating loss carryforwards available for TechPrecision’s consolidated tax group may be limited. Also, U.S. tax laws limit the time during which these loss carryforwards may be applied against future taxes. Our remaining pre-2021 net operating losses total approximately $9.8 million.

We have not accrued any penalties with respect to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. Tax years 2018 and forward remain open for examination.