Income before income taxes for all periods presented is from domestic operations, which are the Company’s only operations. During the years ended September 30, 2019, 2018, and 2017, the Company recorded income tax benefit (expense) as follows:

	Years Ended September 30,
	2019			2018			2017
	(in thousands)
Current income tax benefit (expense):
Federal	$	(1,841	)	$	(16,449	)	$	(10,078	)
State		(372	)		(2,858	)		(813	)
Deferred income tax benefit (expense):
Federal		2,431			(2,245	)		1,503
State		608			387			151
	$	826		$	(21,165	)	$	(9,237	)

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:

	Years Ended September 30,
	2019			2018			2017
Federal statutory income tax rate		21.0	%		24.5	%		35.0	%
State taxes, net of federal benefit		1.8			2.6			2.7
Federal research and development tax credit		(12.8	)		(5.2	)		(7.4	)
Remeasurement of net deferred tax assets		—			4.2			—
Share-based compensation		(6.7	)		(2.8	)		4.5
Foreign-derived intangible income		(3.2	)		—			—
Other		(1.9	)		(0.6	)		(0.5	)
Effective income tax rate		(1.8	%)		22.7	%		34.3	%

Net deferred tax assets as of September 30, 2019 and 2018 consisted of the following:

	September 30,
	2019			2018
	(in thousands)
Deferred tax assets:
Share-based compensation	$	9,901		$	7,372
Other temporary differences		915			828
Accrued compensation		821			696
Tax credit carryforwards		763			—
Accrued expenses		150			60
Capitalized research and development expenses		—			223
Unrealized loss		—			139
Total deferred tax assets		12,550			9,318
Valuation allowance		—			—
Net deferred tax assets		12,550			9,318

Deferred tax liabilities:
Depreciation		(1,027	)		(798	)
Prepaid expenses		(148	)		(145	)
Unrealized gain		(34	)		—
Total deferred tax liabilities		(1,209	)		(943	)
Net deferred income tax assets (liabilities)	$	11,341		$	8,375

The net deferred tax asset is presented as a long-term asset on the consolidated balance sheets.

After consideration of all the evidence, both positive and negative, the Company determined that no valuation allowance was needed for all or a portion of its deferred tax assets as of September 30, 2019 because it is more likely than not that the deferred tax assets will be realized. In subsequent periods, the Company may determine that it is more likely than not that the deferred tax assets will not be realized, and thus a valuation allowance may be recorded against all or any portion of its deferred tax assets on the Company’s consolidated balance sheet with a corresponding non-cash charge to income tax expense in the consolidated statements of operations.

As of September 30, 2019, the Company had a federal and state research and development tax credit carryforward of $635 and $310, respectively, for tax return purposes, a majority of which begin to expire in 2039.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The Company’s tax years in the U.S. are still open under statute from 2015 to the present. Earlier years may be examined to the extent that tax credit or net operating loss carryforwards are used in future periods. During 2018, the Company received notice of examination by the Internal Revenue Service (“IRS”) for the year ending September 30, 2016. The Company received and agreed to a notice of proposed adjustment from the IRS which was paid in September 2018, the amount of which was immaterial to the financial statements. The Company is in the process of finalizing the completion of the IRS audit. During October 2018, the Company received notice of examination by the Massachusetts Department of Revenue (“DOR”) for the years ending September 30, 2015 and September 30, 2016. No adjustments have been agreed to date. The Company has not received notice of examination by any other jurisdictions for any other tax year open under statute.

Uncertain tax positions represent tax positions for which reserves have been established. The Company’s policy is to record interest and penalties related to uncertain tax positions as part of income tax expense. Total interest related to uncertain tax positions recorded as a liability on the Company’s consolidated balance sheets were $244 and $113 as of September 30, 2019 and 2018, respectively. A reconciliation of the beginning and ending amount of uncertain tax positions is summarized as follows:

	September 30,
	2019			2018
	(in thousands)
Beginning Balance	$	1,679		$	1,175
Additions based on tax positions for the current period		156			563
Reductions for tax positions due to lapse of statute of limitations		(87	)		—
Reductions for tax positions of prior periods		(98	)		(59	)
Ending Balance	$	1,650		$	1,679

The Company does not expect that its uncertain tax position will materially change within the next twelve months.