For the years ended December 31, 2019, 2018, and 2017, the Company recognized no provision or benefit from income taxes. The difference between the Company’s provision for income taxes and the amounts computed by applying the statutory federal income tax rate to income before income taxes is as follows (in thousands):

	Year Ended December 31,
	2019			2018			2017
Tax provision derived by applying the federal statutory rate to income before income taxes	$	(16,433	)	$	(9,313	)	$	(9,260	)
Permanent differences and other		(98	)		264			296
Federal tax credits		(3,599	)		(1,211	)		(1,294	)
State tax credits		(229	)		464			(284	)
Change in tax rate		—			—			7,869
Change in the valuation allowance		20,359			9,796			2,673
Income tax expense /(benefit)	$	—		$	—		$	—

The components of the deferred tax assets and liabilities consist of the following (in thousands):

	December 31,
	2019			2018
Deferred tax assets
Net operating loss carryforward	$	36,093		$	20,276
Intangible assets		45			38
Accrued expense		605			508
Stock-based compensation		1,237			682
Federal tax credits		10,859			7,260
State tax credits		588			359
Other		126			73
Total deferred tax assets		49,553			29,196
Deferred tax liabilities
Depreciable assets	$	(72	)	$	(74	)
Total deferred tax liabilities		(72	)		(74	)
Less: Valuation allowance		(49,481	)		(29,122	)
Deferred tax assets, net	$	—		$	—

On December 22, 2017, the 2017 Tax Act was signed into law making significant changes to the Internal Revenue Code. The legislation significantly changed U.S. tax law by, among other things, lowering corporate income tax rates from a maximum of 35% to a flat 21% rate and reducing the orphan drug credit from 50% to 25% of qualifying expenditures, effective for tax years beginning after December 31, 2017. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate under the 2017 Tax Act, the Company revalued its deferred tax assets and liabilities as of December 31, 2017 resulting in a $7.9 million decrease in net deferred assets, with a corresponding reduction in the valuation allowance. The accounting for the income tax effects of the 2017 Tax Act and related adjustments were completed and included in the financial statements as of and for the year ended December 31, 2017. There were no other income tax effects from the 2017 Tax Act for the years ended December 31, 2019 and 2018.

The Company has established a full federal and state valuation allowance equal to the net deferred tax assets due to uncertainties regarding the realization of the deferred tax asset based on the Company’s lack of earnings history. The valuation allowance increased by $20.4 million, $9.8 million, and $2.7 million during the years ended December 31, 2019, 2018, and 2017, respectively, primarily due to continuing loss from operations.

As of December 31, 2019 and 2018, the Company had U.S. net operating loss carryforwards (“NOL”) of $171.9 million and $96.6 million, respectively. As of December 31, 2019 and 2018, the Company had U.S. tax credit carryforwards of $10.9 million and $7.3 million, respectively, and state tax credit carryforwards of $0.6 million and $0.4 million, respectively. The net operating loss and tax credit carryforwards of $58.4 million and $10.9 million, respectively, will begin to expire in 2033, if not utilized. The net operating loss and credit carryforwards are subject to Internal Revenue Service adjustments until the statute closes on the year the net operating loss or tax credits are utilized.

The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company’s formation due to the complexity and cost associated with such a study, and the fact that there may be additional such ownership changes in the future. If the Company has experienced an ownership change at any time since its formation, utilization of the NOL or R&D credit carryforwards would be subject to an annual limitation under Section 382 or 383 of the Internal Revenue Code, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Additionally, the separate return limitation year (“SRLY”) rules may apply to losses of the Company’s seven wholly-owned U.S. subsidiary corporations. The SRLY rules limit the consolidated group’s use of a subsidiary corporation’s net operating losses to the amount of income generated by the subsidiary corporation after it becomes a member of the group. Any limitation may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. Further, until a study is completed and any limitation known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Additionally, the Company does not expect any unrecognized tax benefits to change significantly over the next twelve months. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance.

The Company files income tax returns in the U.S. and state jurisdictions. The Company is subject to examination by taxing authorities in its significant jurisdictions for the 2015 and subsequent years. However, due to NOL and tax attribute carryovers, the taxing authorities have the ability to adjust the NOLs and other tax attributes related to closed years. As of December 31, 2019 and 2018, there were no amounts recorded for uncertain tax positions.