Income Taxes

Significant components of the provision (benefit) for income taxes are as follows (in thousands):



	Year Ended December 31,
	2014		2013			2012
Current provision (benefit):
Federal	$	—	$	(49	)	$	(128	)
State	41		4			51
Total current provision (benefit)	41		(45		)	(77		)
Deferred provision:
Federal	18		—			—
State	3		—			—
Total deferred provision	21		—			—
Total income tax provision (benefit)	$	62	$	(45	)	$	(77	)

Differences between the provision (benefit) for income taxes and income taxes at the statutory federal income tax rate are as follows:



	Year Ended December 31,
	2014		2013		2012
Income tax expense (benefit) at statutory federal rate	35.0	%	35.0	%	(35.0	)%
State income tax expense (benefit), net of federal benefit	4.8	%	7.2	%	(2.9	)%
Permanent differences and other	(2.9	)%	14.8	%	1.4	%
Research and development credits, current year	—	%	(58.1	)%	(2.6	)%
Research and development credits, prior year	—	%	(39.1	)%	—	%
Change in effective state tax rates	(3.2	)%	(25.6	)%	2.4	%
Expiration of net operating loss carryovers	1.1	%	8.2	%	36.6	%
Stock compensation expense	0.1	%	53.7	%	—	%
Reserve for uncertain tax positions and other reserves	—	%	5.4	%	(2.4	)%
Change in valuation allowance	(32.5	)%	(22.2	)%	1.0	%
Provision (benefit) for income taxes	2.4	%	(20.7	)%	(1.5	)%

As of December 31, 2014, we had federal and state income tax net operating loss carryforwards of $93.2 million and $28.0 million, respectively. Federal loss carryforwards will begin to expire in 2018 unless previously utilized. State loss carryforwards of less than $0.1 million expired in 2014, and approximately $4.1 million is set to expire in 2015 unless previously utilized. We also have federal and California research and other credit carryforwards of approximately $1.8 million and $2.1 million, as of December 31, 2014, respectively. The federal credits will begin to expire in 2018. The California research credits have no expiration. Pursuant to Internal Revenue Code Sections 382 and 383, use of our net operating loss and credit carryforwards may be limited because of a cumulative change in ownership greater than 50% which may have occurred or which may occur in the future.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2014. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future income. On the basis of this evaluation, as of December 31, 2014, a valuation allowance has been recorded as management cannot conclude that it is more likely than not that the existing deferred tax assets will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projected future income.

Our net deferred tax assets (liabilities) consisted of the following (in thousands):



	December 31,
	2014			2013
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	33,732		$	34,727
Research and development and other credits	1,950			1,928
Reserves	1,417			1,273
Intangibles	2,097			2,425
Other, net	1,079			830
Total deferred tax assets	40,275			41,183
Deferred tax liabilities—depreciation	(237		)	(300		)
Valuation allowance for deferred tax assets	(40,059		)	(40,883		)
Net deferred tax assets (liabilities)	$	(21	)	$	—

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):



	December 31,
	2014		2013			2012
Balance at beginning of year	$	1,553	$	1,539		$	1,621
Increases related to prior year tax positions	—		5			25
Increases related to current year tax positions	—		64			81
Expiration of the statute of limitations for the assessment of taxes	—		(55		)	(252		)
Change in valuation allowances	—		—			64
Balance at end of year	$	1,553	$	1,553		$	1,539

Included in the unrecognized tax benefits of $1.6 million at December 31, 2014 was $1.3 million of tax benefits that, if recognized, would reduce our annual effective tax rate, subject to the valuation allowance. We do not expect our unrecognized tax benefits to change significantly over the next 12 months.

We file income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. We are no longer subject to income tax examination by tax authorities for years prior to 2009; however, our net operating loss carryforward and research credit carryforwards arising prior to that year are subject to adjustment. Our policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest and penalties as of December 31, 2014 and 2013 ,and no interest and penalties were recognized during the years ended December 31, 2014, 2013, and 2012.