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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes by jurisdiction consists of the following as of December 31, 2021and 2020 (in thousands):
 20212020
U.S. federal:
Current$— $— 
Deferred— — 
Total U.S. federal— — 
U.S. state and local:
Current1 1 
Deferred— — 
Total U.S. state and local1 1 
Foreign:
  Current — — 
  Deferred— — 
Total foreign— — 
Provision for income taxes$1 $1 
Income taxes differ from the amounts computed by applying the U.S. federal income tax rate to pretax income (loss) before income taxes as a result of the following (in thousands):
 20212020
Expected income tax benefit$(7,554)$(5,966)
State income tax (benefit), net of federal benefit (2,812)(1,961)
Valuation allowance 10,761 7,732 
Permanent differences:
Stock options255 353 
Research & development credit(617)(560)
Adjustment to deferred taxes(55)400 
Foreign rate differential1 (1)
Other22 4 
Provision for income taxes$1 $1 
For each of the years ended December 31, 2021 and 2020 we recorded a net income tax provision of $1,000. Deferred income tax reflects the tax effects of temporary differences that gave rise to significant portions of our deferred tax assets and liabilities.
Deferred income tax consists of the following (in thousands):
 Balance, December 31, 2021Balance, December 31, 2020
U.S. federal and state deferred tax assets—long term:
Accrued payroll$200 $180 
Accrued expenses54 53 
Fixed assets36 17 
Charitable contributions28 14 
Intangibles473 431 
Research & development credit4,874 3,830 
Net operating loss44,772 35,279 
Stock compensation658 519 
Lease liabilities499 700 
New jobs credit8 8 
Total long-term assets
51,602 41,031 
Total deferred tax assets
51,602 41,031 
U.S. federal and state deferred tax liabilities—long term:
Right of use assets(432)(621)
Total deferred tax liabilities
(432)(621)
Net deferred tax assets - long term51,170 40,410 
 Less: Valuation allowance
(51,170)(40,410)
Net deferred tax assets
$— $— 
Foreign deferred tax assets—long term:
Net operating loss$8 $6 
Total foreign deferred tax assets
8 6 
       Less: Valuation allowance
(8)(6)
      Net deferred tax assets$— $— 
    We recorded a full valuation allowance against our U.S. federal and state net deferred tax assets at December 31, 2021 and December 31, 2020. In determining the need for a valuation allowance, we reviewed all available evidence pursuant to the requirements of FASB ASC Topic 740, Income Taxes. Based upon our assessment of all available evidence, we have concluded that it is more likely than not that the net deferred tax assets will not be realized. For the year ended December 31, 2021, the valuation allowance increased by $10.8 million. For the year ended December 31, 2020, the valuation allowance increased by $7.7 million.
As of December 31, 2021, we had federal net operating loss carryforwards of approximately $159.4 million, state net operating loss carryforwards of approximately $162.1 million and foreign net operating loss carryforwards of $52,000 in Switzerland. In accordance with the 2017 Tax Act, the $112.5 million federal net operating loss carryforwards generated on or after January 1, 2018 will not expire and will be limited to 80% usage. The federal net operating loss carryforwards generated prior to January 1, 2018 will begin to expire in 2033, and the state net operating loss carryforwards will begin to expire in 2033. Our ability to utilize federal net operating loss carryforwards may be limited in the event that a change in ownership, as defined in Section 382 of the Internal Revenue Code, occurs in the future. States may vary in its conformity to Section 382 of the Internal Revenue Code. In the event a change of ownership occurs, it will limit the annual usage of the carryforwards in future years. In 2014 and 2017 ownership changes, as defined in Section 382 of the Internal Revenue Code, occurred which resulted in annual limitations on our federal net operating loss carryforwards; however, we believe it is more likely than not that none of the federal net operating loss carryforwards will expire as a result of the limitations under Section 382.
We recognize interest and penalties related to income tax matters in income taxes, and there were none during the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, no liability for unrecognized tax benefits was required to be reported.
ASC 740 guidance requires us to identify, evaluate and measure all uncertain tax positions taken or to be taken on tax returns and to record liabilities for the amount of these positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. Although we believe that our estimates and judgments are reasonable, actual results may differ from these estimates. Some or all of these judgments are subject to review by the taxing authorities. For the year ended December 31, 2021, we had uncertain tax positions of $1.2 million as a result of research and development tax credits claimed on our annual tax returns. We had uncertain tax positions of $1.0 million for the year ended December 31, 2020.
Our annual income taxes and the determination of the resulting deferred tax assets and liabilities involve a significant amount of judgment. Our judgments, assumptions and estimates relative to current income taxes take into account current tax laws, their interpretation of current tax laws and possible outcomes of future audits conducted by domestic tax authorities. We operate within federal and state taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues which may require an extended period of time to resolve.  We are currently not being examined by any tax authorities. We are subject to taxation in the United States, California, Massachusetts and Switzerland. As of December 31, 2021, our tax years remain open to examination by the taxing authorities for all years since our incorporation in 2013.