9. Provision for Income Tax

Provision for income tax consists of the following:

Current income tax expense, which represents the amount of federal tax and state and local tax currently payable, including interest and penalties and amounts accrued for unrecognized tax benefits, if any, and;

Deferred income tax, which represents the net change in the deferred tax assets balance during the year, including any change in the valuation allowance of the deferred tax assets, if any.

There was no change in the valuation allowance of the deferred tax assets for the three and six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019 and December 31, 2018, the Company had $348,000 and $79,000 of income taxes receivable, respectively, which are included in prepaid expenses and other assets on the condensed consolidated statements of financial condition. The following table presents the components of provision for income tax as of the periods indicated (unaudited):

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019		2018
Current income tax expense / (benefit)
Federal	$	(69,000	)	$	298,000		$	134,000	$	570,000
State		106,000			(161,000	)		182,000		(20,000	)
		37,000			137,000			316,000		550,000

Deferred income tax
Federal		264,000			—			311,000		—
State		148,000			—			191,000		—
		412,000			—			502,000		—

Total Provision for income tax	$	449,000		$	137,000		$	818,000	$	550,000

Effective Tax Rate

For interim financial reporting, the Company estimates the effective tax rate for tax jurisdictions which is applied to the year to date income before provision for income tax. For the three months ended June 30, 2019 and 2018, the Company’s effective tax rate was 31% and 7%, respectively. For the six months ended June 30, 2019 and 2018, the Company’s effective tax rate was 29% and 14%, respectively.

As of December 31, 2018, the Company recorded an income tax benefit related to the recognition of deferred tax assets of $5,576,000. The increase in the effective tax rate in 2019 was due to an increase in deferred income tax expense corresponding to the decrease in the deferred tax assets. Deferred income tax expense was $194,000 and $502,000 for the three months and six months ended June 30, 2019, respectively.