Income Taxes

The following table summarizes the components of our income tax (benefit) expense (in thousands):



	Year ended December 31,
	2019			2018
Current:
Federal	$	(13	)	$	(26	)
State	1			1
	(12		)	(25		)
Deferred:
Federal	13			87
State	—			—
	13			87
Income tax expense	$	1		$	62

The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision (in thousands):



	Year ended December 31,
	2019			2018
Expected income tax benefit at federal statutory tax rate	$	(3,904	)	$	(10,216	)
State income taxes, net of federal benefit	(1,390		)	(3,005		)
Tax credits	(374		)	(3,666		)
Change in valuation allowance	603			12,706
Return to provision adjustments	(358		)	441
Stock compensation	3,934			251
Reserve for uncertain tax positions	1,444			3,596
Other	46			(45		)
Income tax expense	$	1		$	62

The following table summarizes the significant components of our deferred tax assets and liabilities (in thousands):



	December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryovers	$	79,675		$	74,965
Research and development and other tax credits	33,429			33,121
Deferred revenue	1			16
Intangibles and property and equipment basis difference	782			—
Stock compensation expense	1,389			5,033
Lease liability	164			—
Other	461			2,027
Total deferred tax assets	115,901			115,162
Total deferred tax liabilities	(325		)	(176		)
Net deferred tax asset	115,576			114,986
Valuation allowance	(115,564		)	(114,960		)
Net deferred tax asset	$	12		$	26

For all periods presented, we have determined that it is more likely than not that our deferred tax asset will not be realized, with the exception of the refundable AMT tax credit. Accordingly, we have recorded a valuation allowance to offset the net deferred tax asset of $115.6 million.

As of December 31, 2019, we had NOL carryforwards for U.S. federal and California state tax purposes of $328.0 million and $276.0 million, respectively, which begin to expire in 2030 and 2031, respectively. The federal NOL generated after 2017 of $64.6 million will carry forward indefinitely and be available to offset up to 80% of future taxable income each year. As of December 31, 2019, we also had federal and California research and development tax credit carryforwards of $31.1 million and $9.1 million, respectively. The federal research and development tax credit carryforwards will begin to expire in 2029. The California research and development tax credit carryforwards are available indefinitely.

Pursuant to Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% (by value) occurs within a three-year period. The Company has not performed an analysis through December 31, 2019 to determine whether its net operating loss and research and development credit carryforwards are subject to annual limitation under Sections 382 or 383 of the Code, and these financial statements do not contain any adjustment relating to such potential limitations. However, if the Company experienced an ownership change that resulted in an annual limitation on the Company’s net operating loss carryforwards under Section 382 of the Code there would be no material impact to the Company’s financial statements.

The following table summarizes the changes in the amount of our unrecognized tax benefits (in thousands):



	Year Ended December 31,
	2019			2018
Beginning balance of unrecognized tax benefits	$	14,700		$	4,421
(Decrease) increase for prior year tax positions	(7		)	5,961
Increase for current year tax positions	1,880			4,318
Total	$	16,573		$	14,700

Included in unrecognized tax benefits of $16.6 million at December 31, 2019 was $13.3 million of tax benefits that, if recognized, would reduce our annual effective tax rate, subject to valuation allowance. We do not expect that there will be a significant change in the unrecognized tax benefits over the next 12 months.

We are subject to taxation in the United States and state jurisdictions where applicable. Our tax years for 2009 and forward are subject to examination by the U.S. tax authorities and our tax years for 2010 and forward are subject to examination by the California tax authorities due to carryforward of unutilized net operating losses and research and development credits.

It is our practice to recognize interest and/or penalties related to income tax matters in income tax expense. For the years ended December 31, 2019 and 2018, we have not recognized any interest or penalties related to income taxes.