The following note related to income taxes includes both continuing and discontinued operations. The components of income (loss) before provision for income taxes are as follows (in thousands):

	Years Ended September 30,
	2020			2019			2018
Domestic	$	(18,652	)	$	916		$	7,845
Foreign		3,673			(4,648	)		(2,320	)
	$	(14,979	)	$	(3,732	)	$	5,525

	Years Ended September 30,
	2020			2019		2018
Current:
Domestic federal	$	(239	)	$	—	$	1,167
Foreign		1,407			1,278		(1,404	)
Foreign withholding taxes		201			94		356
Domestic state		(59	)		58		101
Total current		1,310			1,430		220
Deferred:
Foreign		(566	)		—		—
Total deferred		(566	)		—		—
Total provision	$	744		$	1,430	$	220

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, included a provision for a five-year carryback of net operating losses. The company has assessed the benefit of the provision and utilized a portion of the 2019 net operating loss carryback to offset income from 2018. The income tax provision as of and for the year ended September 30, 2020 reflects such impact.

Due to the tax treatment relating to the sales of SoLayTec and Tempress, we realized income tax benefits of $1.3 million and $11.1 million. We realized income tax expense of $0.2 million for the sale of R2D. The income tax benefits for SoLayTec and Tempress are reflected in our discontinued operations in 2019 and 2020, respectively. The income tax expense for R2D is reflected in our continuing operations in 2020. The income tax expense (benefit) is fully offset by a valuation allowance.

The TCJA was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limits the deduction of interest expense for certain companies. The TCJA is a fundamental change to the taxation of multinational companies, including a shift from a system of worldwide taxation with some deferral elements to a territorial system, current taxation of certain foreign income, a minimum tax on low-tax foreign earnings, and new measures to curtail base erosion and promote U.S. production.

As a result of the TCJA, the statutory rate applicable to our fiscal year ended September 30, 2018 was 24.3%, based on a fiscal year blended rate calculation. ASC 740 requires filers to record the effect of tax law changes in the period enacted. In the first quarter of fiscal 2018, we re-measured the applicable deferred tax assets based on the rates at which they are expected to reverse. We adjusted our gross deferred tax assets and liabilities and recorded a corresponding offset to our full valuation allowance against our net deferred tax assets, which resulted in minimal net effect to our provision for income taxes and effective tax rate.

The TCJA includes a one-time mandatory repatriation transition tax on certain net accumulated earnings and profits of our foreign subsidiaries. We have analyzed the earnings and profits of our foreign subsidiaries and determined that no transition taxes are due or expected. The other provisions of TCJA are either immaterial or not applicable.

A reconciliation of actual income taxes to income taxes at the expected United States federal corporate income tax rate is as follows (in thousands, except percentages):

	Years Ended September 30,
	2020			2019			2018
Federal statutory rate		21.0	%		21.0	%		24.3	%
Tax (benefit) expense at the federal statutory rate	$	(3,146	)	$	(784	)	$	1,342
Effect of permanent book-tax differences		145			272			75
State tax provision		34			31			76
Valuation allowance for net deferred tax assets		3,775			1,682			617
Uncertain tax items		(47	)		74			(3,013	)
Tax rate differential		222			150			1,107
Other items		(239	)		5			16
	$	744		$	1,430		$	220

Deferred income taxes reflect the tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and deferred tax liabilities are as follows (in thousands):

	September 30, 2020			September 30, 2019
Deferred tax assets (liabilities):
Capitalized inventory costs	$	204		$	168
Inventory write-downs		991			2,856
Accrued warranty		53			161
Deferred profits		1			346
Accruals and reserves not currently deductible		2,913			3,531
Stock option expense		806			849
Federal net operating loss carryforwards		18,445			6,979
Foreign and state net operating losses		231			10,481
Book vs. tax depreciation and amortization		(1,465	)		(1,546	)
Other deferred tax assets		120			75
Total deferred tax assets		22,299			23,900
Valuation allowance		(21,733	)		(23,900	)
Deferred tax assets, net of valuation allowance	$	566		$	—

	Years Ended September 30,
	2020			2019
Balance at the beginning of the year	$	23,900		$	23,769
(Reductions) additions to valuation allowance		(2,167	)		131
Balance at the end of the year	$	21,733		$	23,900

The deferred tax valuation allowance decreased by $2.2 million and increased by $0.1 million for the years ended September 30, 2020 and 2019, respectively. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future income and tax planning strategies in making this assessment. We have established valuation allowances on substantially all net U.S. deferred tax assets, after considering all of the available objective evidence, both positive and negative, historical and prospective, with greater weight given to historical evidence, and determined it is not more likely than not that these assets will be realized. In 2020, we reversed a portion of the valuation allowance related to foreign deferred tax assets which we have determined will be utilized against net

operating income in future years. In 2019 and 2018, we reversed a portion of the valuation allowance related to net operating loss carryforwards which we had determined would be utilized against net operating income in the respective years. We will continue to monitor our cumulative income and loss positions in the U.S. and foreign jurisdictions to determine whether full or partial valuation allowances on net deferred tax assets are appropriate.

As of September 30, 2020, we have federal net operating loss carryforwards of approximately $13.8 million that expire at various times between 2028 and 2035. The utilization of those federal net operating losses are limited to approximately $0.8 million per year. Additionally, we have federal net operating loss carryforwards of approximately $74.1 million that have an indefinite carryforward period. The utilization of those federal net operating losses are limited to 80% of taxable income after 2021. We have no foreign net operating loss carryforwards as of September 30, 2020. We have approximately $21.6 million of state net operating loss carryforwards.

We apply the accounting guidance for uncertainty in income taxes using the provisions of ASC 740. In this regard, an uncertain tax position represents our expected treatment of a tax position taken in a filed tax return or planned to be taken in a future tax return that has not been reflected in measuring income tax expense for financial reporting purposes. Approximately $0.5 million of this total represents the amount that, if recognized, would favorably affect our effective income tax rate in future periods.

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows (in thousands):

	Years Ended September 30,
	2020			2019		2018
Balance at beginning of the year	$	1,272		$	1,198	$	4,210
Additions related to tax positions taken in prior years		—			74		155
Reductions due to resolution of uncertain tax position		(47	)		—		(3,167	)
Balance at the end of the year	$	1,225		$	1,272	$	1,198

We have classified all of our liabilities for uncertain tax positions as income taxes payable long-term. Income taxes long-term also includes other items, primarily withholding taxes that are not due until the related intercompany service fees are paid.

We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net expense (benefit) for interest and penalties of $4,000, $0.1 million and $(2.0) million for 2020, 2019 and 2018, respectively. Income taxes payable long-term on the Consolidated Balance Sheets includes a cumulative accrual for potential interest and penalties of $0.8 million as of September 30, 2020 and 2019.

We do not expect that the amount of our tax reserves for uncertain tax positions will materially change in the next 12 months other than the continued accrual of interest and penalties.

Amtech and one or more of our subsidiaries file income tax returns in China and other foreign jurisdictions, as well as the U.S. and various states in the U.S. We have not signed any agreements with the Internal Revenue Service, any state or foreign jurisdiction to extend the statute of limitations for any fiscal year. As such, the number of open years is the number of years dictated by statute in each of the respective taxing jurisdictions, but generally is from 3 to 5 years.

These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenues and expenses, or the sustainability of income tax positions of Amtech and our subsidiaries.