	December 31,
	2018			2017			2016
Current:
Federal	$	—		$	—		$	—
State		(389	)		(204	)		(468	)
		(389	)		(204	)		(468	)
Deferred:
Federal		—			—			—
State		—			—			—
		—			—			—
Benefit from income taxes	$	(389	)	$	(204	)	$	(468	)

The Company’s tax benefits relate to state R&D tax credits exchanged for cash. The State of Connecticut provides companies with the opportunity to exchange certain R&D credit carryforwards for cash in exchange for foregoing the carryforward of the R&D credit. The program provides for such exchange of the R&D credits at a rate of 65% of the annual R&D credit, as defined.

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations is as follows:

	December 31,
	2018			2017			2016
Income taxes using U.S. federal statutory rate		21.00	%		34.00	%		34.00	%
State income taxes, net of federal benefit		6.82	%		5.33	%		5.44	%
Tax Cuts and Jobs Act		0.00	%		-44.43	%		0.00	%
Impact of R&D tax credit on effective tax rate		3.48	%		3.25	%		3.24	%
Stock option shortfalls and cancellations		-0.43	%		0.21	%		-0.07	%
Permanent items and other		-0.15	%		-0.56	%		-0.64	%
Change in valuation allowance		-31.76	%		2.55	%		-41.17	%
Provision to return		0.03	%		0.00	%		0.00	%
Non-taxable revenue		1.54	%		0.00	%		0.00	%
		0.53	%		0.35	%		0.80	%

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

	December 31,
	2018			2017
Deferred tax assets:
Net operating loss carryforwards	$	73,578		$	54,831
Federal and state tax credits		11,108			8,401
Deferred revenue		1,111			—
Stock-based compensation expense		3,605			2,382
Other		420			582
		89,822			66,196
Deferred tax liabilities:
Accelerated depreciation		(7	)		(23	)
Valuation allowance		(89,815	)		(66,173	)
Net deferred tax asset	$	—		$	—

A 100% valuation allowance has been recorded on the deferred tax asset as of December 31, 2018 and 2017 because management believes it is more likely than not that the asset will not be realized. The change in the valuation allowance during 2018 and 2017 was $23,642 and $618, respectively.

In 2017, the Company recorded a cumulative-effect adjustment for the tax benefit of approximately $840 related to the exercise of non-qualified stock options and the disqualified disposition of incentive stock options. As a result of the adoption of ASU 2016-09 on January 1, 2017, the tax benefit related to the exercise of stock options was recognized as a deferred tax asset with a corresponding cumulative adjustment to retained earnings, that is offset by a valuation allowance against retained earnings.

The Company applies the provisions of ASC 740, Income Taxes, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, 2018 and 2017, the Company had no unrecognized tax benefits or related interest and penalties accrued. In the event the Company determines that accrual of interest or penalties are necessary in the future, the amount will be presented as a component of income tax expense.

The Company files income tax returns in the United States and the State of Connecticut. All tax years since the date of the Company’s incorporation remain open to examination by the major taxing jurisdictions (state and federal) to which the Company is subject, as carry-forward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service, or IRS, or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS, or any other jurisdictions, for any tax year.

At December 31, 2018, the Company had federal and state net operating loss carryforwards of approximately $274,764 and $267,973, respectively. The federal and state tax loss carryforwards will begin to expire in 2026 and 2027, respectively, unless previously utilized. The federal net operating losses arising in 2018 and forward have an unlimited carryforward period, however will only offset 80% of taxable income in a carryforward year. The federal losses may also be subject to limitation pursuant to Internal Revenue Code section 382. The Company also had federal and state R&D tax credit carryforwards of approximately $9,925 and $1,236, respectively. The federal credits will begin expiring in 2025 unless previously utilized. The Connecticut credit carryforwards have no expiration period. Because of the net operating loss and research credit carryforwards, tax years 2006 through 2018 remain open to U.S. federal and state tax examinations.

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”). The Act, which is also commonly referred to as “U.S. tax reform”, significantly changes U.S. corporate income tax laws by, among other provisions, reducing the maximum U.S. corporate income tax rate from 35% to 21% starting in 2018. During the year ended December 31, 2017, the Company reduced deferred tax assets by $25,913, offset by a corresponding reduction to its valuation allowance, as a result of the re-measurement of deferred tax assets and liabilities from its 34% effective rate under existing law to the new lower statutory rate of 21%. As of December 31, 2018 and 2017, the Company did not have any foreign subsidiaries and the international aspects of the Act were not applicable.

On December, 22, 2017, SAB 118 was issued due to the complexities involved in accounting for the recently enacted Tax Act. SAB 118 requires the Company to include in its financial statements a reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Accordingly, the U.S. provision for income tax for 2017 was based on the reasonable estimate guidance provided by SAB 118. The Company has finalized its accounting for the Act as of December 31, 2018, which resulted in insignificant adjustments.