(4) Income Taxes

The provision for income taxes includes the following components (in thousands):

	Year ended December 31,

	2013		2012		2011
Current tax provision (benefit):
Federal	$	1,767	$	—	$	—
State		343		441		396


		2,110		441		396


Deferred tax provision (benefit):
Federal		34,728		31,791		(21,533	)
State		2,738		2,507		(1,698	)


		37,466		34,298		(23,231	)


Provision (benefit) for income taxes		39,576		34,739		(22,835	)

The following is a reconciliation between the statutory Federal income tax rate of 35% and the effective rate which is derived by dividing the provision (benefit) for income taxes by income (loss) before for income taxes adjusted for permanent differences (in thousands):

	Year ended December 31,

	2013			2012			2011
Computed "expected" provision (benefit) for income taxes at the statutory rates adjusted for permanent differences	$	37,743		$	32,983		$	(14,683	)
Increase (decrease) in income taxes resulting from:
Purchase accounting (gain) adjustment		—			—			1,999
State income tax provision (benefit), net of Federal income tax benefit		2,867			2,220			(1,810	)
Valuation allowance changes affecting the provision for income taxes		1,430			1,614			—
Other, net		(2,464	)		(2,078	)		(8,341	)


Provision (benefit) for income taxes		39,576			34,739			(22,835	)

For the years ended December 31, 2013 and 2012, the Company recorded a $1.4 million and $1.6 million valuation allowance against certain deferred tax assets associated with capital losses with a limited carryforward period, respectively. The Company anticipates the carryforward period will lapse prior to utilization of the deferred tax assets.

The significant components of the net deferred tax assets and liabilities are as follows (in thousands):

	As of December 31,

	2013			2012
Deferred tax assets:
Intangible Asset	$	36,164		$	37,031
Accrued benefits		40,850			40,469
Net operating loss carryforward		85,885			118,448
AMT credit carryforward		17,649			15,882
Deferred aircraft credits		44,350			48,124
Accrued reserves and other		30,987			31,846


Total deferred tax assets		255,885			291,800


Valuation allowance		(3,044	)		(1,614	)


Deferred tax liabilities:
Accelerated depreciation		(824,149	)		(823,487	)


Total deferred tax liabilities		(824,149	)		(823,487	)


Net deferred tax liability		(571,308	)		(533,301	)

The Company's deferred tax liabilities were primarily generated through an accelerated bonus depreciation on newly purchased aircraft and support equipment in accordance with IRS Section 168(k) in combination with shorter depreciable tax lives.

The Company's valuation allowance is related to certain deferred tax assets with a limited carry-forward period. The Company does not anticipate utilizing these deferred tax assets prior to the lapse of the carry-forward period.

At December 31, 2013, the Company had federal net operating losses of approximately $191.5 million and state net operating losses of approximately $651.2 million, which will start to expire in 2026 and 2014, respectively. As of December 31, 2013, the Company also had an alternative minimum tax credit of approximately $17.6 million which does not expire.

In conjunction with the ExpressJet Merger, the Company acquired non-amortizable intangible tax assets and other tax assets that are not anticipated to provide a tax benefit until 2027 or later due to statutory limitations. Because of the uncertainty associated with the realization of those tax assets, the Company had a full valuation allowance of approximately $69.8 million on such tax assets as of December 31, 2013 and $73.0 million as of December 31, 2012. The Company also has a valuation allowance against deferred tax assets of approximately $1 million for net operating losses in states with short carry-forward periods. The deferred tax assets in the table above are shown net of these valuation allowances.