INCOME TAXES

The provision (benefit) for income taxes on income (loss) from continuing operations consists of the following:



	2019			2018			2017
Current
Federal	$	(287	)	$	(178	)	$	278
State	107			(116		)	(950		)
Total current	(180		)	(294		)	(672		)

Deferred
Federal	(385		)	(434		)	7,535
State	(92		)	(103		)	646
Total deferred	(477		)	(537		)	8,181
Income tax provision (benefit)	$	(657	)	$	(831	)	$	7,509

Differences between the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to income (loss) from continuing operations before taxes are summarized as follows:



	2019			2018			2017
Federal statutory rate	21		%	21		%	35		%
Statutory rate applied to income (loss) from continuing operations before taxes	$	3,142		$	(4,685	)	$	(635	)
Plus state income taxes, net of federal tax effect	12			(173		)	(198		)
Total statutory provision (benefit)	3,154			(4,858		)	(833		)
Effect of differences:
Nondeductible meals and entertainment	77			90			161
Executive compensation limitation	—			258			—
Federal tax credits	(545		)	(286		)	(200		)
Reserve for uncertain tax positions	39			27			8
Change in valuation allowance	(3,400		)	3,990			6,470
Tax reform	—			—			1,749
Stock-based compensation	86			82			146
Other items	(68		)	(134		)	8
Income tax provision (benefit)	$	(657	)	$	(831	)	$	7,509

On December 22, 2017, the President signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. The Company substantially completed its provisional analysis of the income tax effects of the Tax Act and recorded a reasonable estimate of such effects during the fourth quarter of 2017. Pursuant to Staff Accounting Bulletin No. 118, the Company has completed its analysis and all adjustments have been included in income from continuing operations as an adjustment to income tax expense.

The income tax benefit for the twelve months ended December 28, 2019 was $657 compared with an income tax benefit of $831 for the twelve months ended December 29, 2018. During the fourth quarter of 2017, the Company recorded a full valuation allowance against the deferred tax assets resulting in only refundable credits, a small amount of state taxes, and benefits for the reduction of certain indefinite lived assets not covered by the Company's valuation allowance being recognized in the tax benefit for 2018 and 2019. The Company is in a net deferred tax liability position of $91 and $568 at December 28, 2019 and December 29, 2018, respectively. These amounts are included in other long-term liabilities in the Company's Consolidated Balance Sheets.

The income tax expense for 2017 was $7,509, which included a charge of $1,749 related to the re-measurement of certain net deferred tax assets using the lower U.S. corporate income tax rate and a charge of $6,420 to increase the Company's valuation allowance related to its net deferred tax asset. The majority of the increase in the valuation allowance was related to the revised treatment of net operating losses under the Tax Act. Absent the impact of the Tax Act, the effective income tax benefit rate for 2017 would have been 36.4%.

Income tax payments, net of (income tax refunds) received for continuing and discontinued operations were $128 in 2019, $20 in 2018 and $44 in 2017.

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



	2019			2018
Deferred tax assets:
Inventories	$	3,336		$	4,128
Retirement benefits	1,394			1,718
State net operating losses	3,362			4,142
Federal net operating losses	715			4,560
State tax credit carryforwards	1,688			1,688
Federal tax credit carryforwards	4,282			3,721
Allowances for bad debts, claims and discounts	1,978			2,199
Other	4,039			5,646
Total deferred tax assets	20,794			27,802
Valuation allowance	(13,264		)	(16,993		)
Net deferred tax assets	7,530			10,809

Deferred tax liabilities:
Property, plant and equipment	7,621			11,377
Total deferred tax liabilities	7,621			11,377

Net deferred tax liability	$	(91	)	$	(568	)

At December 28, 2019, $715 of deferred tax assets related to approximately $3,404 of federal net operating loss carryforwards and $3,362 of deferred tax assets related to approximately $63,244 of state net operating loss carryforwards. In addition, $4,282 of federal tax credit carryforwards and $1,688 of state tax credit carryforwards were available to the Company. The federal tax credit carryforwards will expire between 2029 and 2040. The federal net operating loss carryforwards generated in 2018 have no expiration. The state net operating loss carryforwards and the state tax credit carryforwards will expire between 2019 and 2040. A valuation allowance of $13,264 is recorded to reflect the estimated amount of deferred tax assets that may not be realized during the carryforward periods. At December 28, 2019, the Company is in a net deferred tax liability position of $91 which is included in other long-term liabilities in the Company's Consolidated Balance Sheets.

Tax Uncertainties

The Company accounts for uncertainty in income tax positions according to FASB guidance relating to uncertain tax positions. Unrecognized tax benefits were $480 at December 28, 2019, $441 at December 29, 2018, and $414 at December 30, 2017. Such benefits, if recognized, would affect the Company's effective tax rate. There were no significant interest or penalties accrued as of December 28, 2019, December 29, 2018, or December 30, 2017.

The following is a summary of the change in the Company's unrecognized tax benefits:



	2019		2018		2017
Balance at beginning of year	$	441	$	414	$	406
Additions based on tax positions taken during a current period	39		27		8
Reductions related to settlement of tax matters	—		—		—
Balance at end of year	$	480	$	441	$	414

The Company and its subsidiaries are subject to United States federal income taxes, as well as income taxes in a number of state jurisdictions. The tax years subsequent to 2015 remain open to examination for U.S. federal income taxes. The majority of state jurisdictions remain open for tax years subsequent to 2015. A few state jurisdictions remain open to examination for tax years subsequent to 2014.