he components of the Company's income before income taxes are as follows:



	Year Ended December 31,
	2017		2016		2015
	(amounts in thousands)
United States	$	3,826	$	3,309	$	3,565
Foreign	475		1,236		595
Income before income taxes	$	4,301	$	4,545	$	4,160

The components of the Company’s income tax benefit are as follows:



	Year Ended December 31,
	2017			2016			2015
	(amounts in thousands)
Current:
Federal	$	(555	)	$	227		$	551
State	(273		)	587			(21		)
Foreign	139			322			220
Total	(689		)	1,136			750
Deferred:
Federal	(23,245		)	(4,114		)	(1,819		)
State	(10,684		)	(866		)	8
Foreign	117			(342		)	267
Total	(33,812		)	(5,322		)	(1,544		)
Total income tax benefit	$	(34,501	)	$	(4,186	)	$	(794	)

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows:



	December 31,
	2017			2016
	(amounts in thousands)
Deferred Tax Assets:
Accrued other and prepaid expenses	$	2,955		$	3,494
Allowance for doubtful accounts	624			704
Intangible Assets	7,776			10,725
Net operating loss carryforwards	14,718			17,228
Derivative interest	—			7,940
Accrued professional liability claims	1,709			2,632
Accrued workers’ compensation claims	2,512			3,439
Share-based compensation	734			—
Credit carryforwards	189			1,055
Other	444			584
Gross deferred tax assets	31,661			47,801
Valuation allowance	(1,076		)	(46,454		)
	30,585			1,347
Deferred Tax Liabilities:
Depreciation	(41		)	(70		)
Indefinite intangibles	(9,964		)	(13,971		)
Tax on unrepatriated earnings	(466		)	(263		)
Share-based compensation	—			(197		)
	(10,471		)	(14,501		)
Net deferred taxes	$	20,114		$	(13,154	)

As of December 31, 2016 the Company had a valuation allowance on its deferred tax assets, exclusive of indefinite-lived intangible deferred tax liabilities, of $46.5 million resulting from a prior history of losses from its operations. As of December 31, 2016, the Company determined that it could not sustain a conclusion that it was more likely than not that it would realize any of its deferred tax assets resulting from recent losses, the difficulty of forecasting future taxable income, and other factors.

For the year ended December 31, 2017, predominantly on the basis of a reassessment of the amount of its deferred tax assets that are more likely than not to be realized, the Company reduced its valuation allowance by $45.4 million (comprised of $15.7 million related to U.S. net operating losses, $4.4 million related to state net operating losses, and $25.3 million related to other net deferred tax assets).

In the reassessment, positive and negative factors were considered to arrive at a conclusion to release the valuation allowance. The primary focus of the analysis emphasized the positive evidence of the Company’s three-year cumulative pre-tax income position and projections of future taxable income which outweighed any negative evidence available. For the twelve quarters ended December 31, 2017, the Company had cumulative pre-tax income adjusted for permanent items of $27.7 million. It also has a history of utilizing net operating losses prior to expiration. Further, the five-year forecast of pre-tax book income is expected to exceed future tax deductions. Growing demand for healthcare solutions for the Company’s customers, including a growing aging U.S. population, and its customers’ pressure to keep costs down by using temporary staffing solutions were also positive factors in the analysis. With regard to negative evidence, there are no material taxable temporary differences to offset deductible temporary differences and no net operating losses available for carryback. Additionally, no tax planning strategies that would impact the valuation allowance analysis have been considered.

The valuation allowance on a portion of state net operating losses not more likely than not realizable was not released after analysis of respective expiration periods and specific state taxable income projections. As of December 31, 2017, a valuation allowance of $1.1 million remained.

On December 22, 2017, the 2017 Tax Act was signed into legislation which, among other changes, reduced the corporate federal income tax rate from 35% to 21% effective for the Company's year ended December 31, 2018. Because a change in tax law is accounted for in the period of enactment, the Company recorded income tax expense of $8.0 million, primarily due to a re-measurement of deferred tax assets and liabilities. The impact of the Global Intangible Low-Taxed Income provision, the transition tax on the deemed repatriation of deferred foreign income, and any future tax impact associated with basis differences on foreign subsidiaries is expected to be immaterial. The 2017 Tax Act is a comprehensive bill containing other provisions, such as limitations on the deductibility of interest expense and certain executive compensation, that are not expected to materially affect the Company.

The Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance on accounting for the tax effects of the 2017 Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting required under the Income Taxes Topic of the FASB ASC. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Tax Act for which the accounting under the Income Taxes Topic of the FASB ASC is complete. To the extent that a company's accounting for certain income tax effects is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply the Income Taxes Topic of the FASB ASC on the basis of the provisions of the tax laws that were in effect immediately before the enactment. The ultimate impact of the 2017 Tax Act in the Company's financial statements is provisional with regard to certain foreign tax provisions and may differ from its estimates due to changes in the interpretations and assumptions made by the Company as well as additional regulatory guidance that may be issued.

As of December 31, 2017 and 2016, respectively, the Company had approximately $166.1 million and $161.1 million of federal, state, and foreign net operating loss carryforwards. The carryforwards will expire as follows: federal between 2032 and 2037, state between 2018 and 2037, and foreign between 2019 and 2022.

The reconciliation of income tax computed at the U. S. federal statutory rate to income tax benefit is as follows:



	Year Ended December 31,
	2017			2016			2015
	(amounts in thousands)
Tax at U.S. statutory rate	$	1,506		$	1,591		$	1,456
State taxes, net of federal benefit	(1,374		)	344			(13		)
Noncontrolling interest	(455		)	(260		)	—
Non-deductible meals and entertainment	2,676			1,546			1,510
Foreign tax expense	175			(5		)	(6		)
Valuation allowances	(45,354		)	(8,379		)	(5,078		)
Uncertain tax positions	1,145			1,090			917
Federal rate change	8,011			—			—
Other	(831		)	(113		)	420
Total income tax benefit	$	(34,501	)	$	(4,186	)	$	(794	)

The tax years of 2008 and 2010 through 2016 remain open to examination by certain taxing jurisdictions to which the Company is subject to tax. During 2017, the Company accrued $0.1 million of India tax on earnings of approximately $0.5 million. India withholding taxes on a dividend of India earnings are not affected by the calculation of U.S. taxes due and continue to be accrued.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is approximately as follows:



	2017			2016		2015
	(amounts in thousands)
Balance at January 1	$	5,180		$	4,071	$	3,777
Additions based on tax positions related to the current year	1,145			1,054		861
Additions based on tax positions related to prior years	—			55		62
Reductions based on settlements of tax positions related to prior years	(439		)	—		(624		)
2017 Tax Act federal tax rate change	(1,859		)	—		—
Other	(220		)	—		(5		)
Balance at December 31	$	3,807		$	5,180	$	4,071

Short-term unrecognized tax benefits are included in other current liabilities on the consolidated balance sheets and were $0.1 million as of December 31, 2017, 2016, and 2015. Long-term unrecognized tax benefits are included in other long-term liabilities on the consolidated balance sheets and were $0.5 million, $0.9 million, and $0.8 million as of December 31, 2017, 2016, and 2015, respectively. See Note 7 - Balance Sheet Details. As of December 31, 2017, 2016, and 2015, the Company had unrecognized tax benefits, which would affect the effective tax rate if recognized, of $4.0 million, $4.9 million, and $3.8 million, respectively. During 2017, the Company had gross increases of $1.1 million to its current year unrecognized tax benefits, related to federal and state tax positions as well as $0.2 million in gross decreases related to statute expirations.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2017 and 2015, the Company recognized a net decrease in interest and penalties of $0.2 million related to statute expirations. During the year ended December 31, 2016, the Company recognized an increase in interest and penalties of $0.1 million. The Company has accrued $0.2 million, $0.5 million, and $0.4 million for the payment of interest and penalties at December 31, 2017, 2016, and 2015, respectively.