The income tax expense (benefit) consists of the following for the years ended March 31:

	(In thousands)
	2021		2020
Current:
Federal	$	969	$	(4,440	)
State		-		6
Total current		969		(4,434	)
Deferred:
Federal		1,447		3,008
State		179		207
Total deferred		1,626		3,215
Income tax expense (benefit)	$	2,595	$	(1,219	)

The net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes are reflected in deferred income taxes. Significant components of the Company’s deferred tax assets consist of the following as of March 31:

	(In thousands)
Deferred Tax Assets	2021		2020
Allowance for credit losses not currently deductible for tax purposes	$	1,647	$	2,948
Share-based compensation		125		320
State net operating loss carryforwards		496		458
Right of use liability		826		462
Other items		158		249
Total deferred tax assets		3,252		4,437

Deferred tax liabilities
Right of use asset		832		457
Other items		137		71
Total deferred tax liabilities		969		528
Deferred income taxes	$	2,283	$	3,909

The income tax expense (benefit) reflects an effective U.S tax rate, which differs from the corporate tax rate for the following reasons:

	(In thousands)
	2021			2020
Income tax expense (benefit) at Federal statutory rate	$	2,303		$	479
Increase (decrease) resulting from:
Federal Fiscal Year 2020 NOL rate differential		-			(414	)
Federal Fiscal Year 2019 NOL rate differential		-			(1,362	)
State income taxes, net of Federal benefit		378			91
Other		(86	)		(13	)
Income tax expense (benefit)	$	2,595		$	(1,219	)

The Company’s effective tax rate increased to 23.7% in fiscal 2021 from (54.3.)% in fiscal 2020, resulting from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). In response to the global impacts of COVID-19 on U.S. companies and citizens, the government enacted the CARES Act on March 27, 2020. The CARES Act included several tax relief options for companies, which resulted in the following provisions available to the Company.

•In May 2020, the Company elected to carryback its fiscal year 2019 net operating losses of $9.7 million to 2013, thus generating a refund of $3.5 million and an income tax benefit of $1.4 million. The tax benefit is the result of the federal income tax rate differential between the current statutory rate of 21% and the 35% rate applicable to 2013.

•The Company elected to carryback its fiscal year 2020 net operating losses of $3.0 million to 2014, thus generating an anticipated refund of $1.0 million and an income tax benefit of $0.4 million. The tax benefit is the result of the federal income tax rate differential between the current statutory rate of 21% and the 35% rate applicable to 2014.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of positive evidence evaluated was the cumulative pre-tax income over the three-year period ended March 31, 2021, cumulative pre-tax income for the next three years, and substantial federal NOL rate differentials, previously noted. As of March 31, 2021, a valuation allowance was not required. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced. Generally, NOL’s begin to expire March 31, 2039.

The Company considers the earnings of the Company’s U.S. subsidiaries to be indefinitely invested outside Canada on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings. The Company has not recorded a deferred tax liability related to the Canadian income taxes and U.S. withholding taxes on approximately $152.5 million of undistributed earnings of the U.S. subsidiaries indefinitely invested outside Canada. If the Company decided to repatriate the U.S. earnings, it would need to adjust its income tax provision in the period the Company determined that the earnings will no longer be indefinitely invested outside of Canada.