INCOME TAXES

The Company’s federal and state income tax provision from continuing operations for the three months and six months ended June 30, 2018 and 2017 is summarized in the following table (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Current
Federal	$	—	$	—	$	—	$	—
State	18		190		35		226
Total current	18		190		35		226
Deferred
Federal	—		437		—		932
State	25		91		56		179
Total deferred	25		528		56		1,111
Total income tax expense	$	43	$	718	$	91	$	1,337

The Company’s reconciliation of the statutory rate from continuing operations to the effective income tax rate for the three months and six months ended June 30, 2018 and 2017 is summarized as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Tax benefit at statutory rate	$	(3,155	)	$	(9,790	)	$	(5,884	)	$	(16,236	)
State tax expense, net of federal taxes	43			190			91			226
Valuation allowance changes affecting income tax provision	2,484			10,266			5,903			17,242
Permanent items	671			52			(19		)	105
Income tax expense	$	43		$	718		$	91		$	1,337

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 or U.S. Federal Tax Reform (the “Reform”). The enactment included broad tax changes that are applicable to BioScrip, Inc. Most notably, the Reform decreased the U.S. corporate income tax rate from a high of 35% to a flat 21% rate effective January 1, 2018. As a result, the Company has revalued its ending net deferred tax assets as of December 31, 2017. At June 30, 2018, the Company had Federal net operating loss (“NOL”) carry forwards of approximately $419.5 million, of which $11.5 million, is subject to an annual limitation, which will begin expiring in 2026 and later. The Company also has a carryforward of approximately $22.1 million related to the interest expense limitation, which is not subject to an expiration period. The Company has post-apportioned state NOL carry forwards of approximately $457.8 million, the majority of which will begin expiring in 2018 and later.