10. Income Taxes

A reconciliation of income tax expense computed using the U.S. federal statutory rates to actual income tax expense is as follows:

	Year Ended April 30,

	2013			2012			2011
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal benefit		(9.6	)		(0.3	)		1.1
R&D and other tax credits		(29.6	)		(3.4	)		(11.3	)
Other		7.4			(1.2	)		(0.5	)

Effective income tax rate		3.2	%		30.1	%		24.3	%

The components of the provision for income taxes are as follows (in thousands):

	Year ended April 30,

	2013			2012			2011
Current:
Federal	$	(3,818	)	$	12,814		$	8,660
State		334			1,651			641

		(3,484	)		14,465			9,301
Deferred:
Federal		5,178			(187	)		859
State		(1,347	)		(1,134	)		(1,836	)

		3,831			(1,321	)		(977	)
Change in valuation allowance		—			(57	)		(5	)

Total income tax expense	$	347		$	13,087		$	8,319

Significant components of the Company's deferred income tax assets and liabilities are as follows (in thousands):

	April 30,

	2013			2012
Deferred income tax assets:
Accrued expenses	$	6,266		$	9,697
Allowances, reserves, and other		3,050			763
Capital loss and credit carry-forwards		4,908			4,508
Unrealized loss on securities		—			454

Total deferred income tax assets		14,224			15,422

Deferred income tax liabilities:
Unrealized gain on securities		(1,811	)		—
Tax over book depreciation		(1,641	)		(836	)

Total deferred income tax liabilities		(3,452	)		(836	)

Net deferred tax assets	$	10,772		$	14,586

At April 30, 2013 and 2012, the Company had approximately $5,083,000 and $4,507,000, respectively, of unrecognized tax benefits all of which would impact the Company's effective tax rate if recognized. The Company estimates that $1,316,000 of its unrecognized tax benefits will decrease in the next twelve months due to statute of limitation expiration.

The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended April 30, 2013 and 2012 (in thousands):

	April 30,

	2013			2012
Balance as of May 1	$	4,507		$	4,655
Increases related to prior year tax positions		539			—
Decreases related to prior year tax positions		(19	)		(533	)
Increases related to current year tax positions		1,141			973
Decreases related to lapsing of statute of limitations		(1,085	)		(588	)

Balance as of April 30	$	5,083		$	4,507

The Company records interest and penalties on uncertain tax positions to income tax expense. As of April 30, 2013 and 2012, the Company had accrued approximately $238,000 and $125,000, respectively, of interest and penalties related to uncertain tax positions. The Company is currently under audit by various state jurisdictions but does not anticipate any material adjustments from these examinations. The tax years 2010, 2011 and 2012 remain open to examination by the IRS for federal income taxes. The tax years 2008 to 2012 remain open for major state taxing jurisdictions.