7. Income Taxes

The income tax provision consists of the following:



	Year Ended
	December 31,
	2019		2018
Current:
Federal	$	—	$	—
State		—		2,168
Total current income taxes		—		2,168
Deferred:
Federal		—		—
State		—		—
Total deferred income taxes		—		—
Total income tax provision	$	—	$	2,168

The components of deferred income taxes are as follows:



	Year Ended
	December 31,
	2019		2018
Deferred tax assets:

Net operating loss carryforwards	$	3,541,500	$	3,144,600
Federal and state tax credit carryforwards		476,100		525,000
Accruals and reserves		150,800		104,400
Stock based compensation		106,400		68,300
Patents and intangibles		5,000		12,000
Other long-term		5,400		45,300
Total long-term deferred tax assets		4,285,200		3,899,600

Deferred tax valuation allowance		(3,877,700)		(3,374,800)
Deferred tax assets, net of allowance		407,500		524,800

Property, plant and equipment		(379,900)		(478,200)
Prepaid expenses		(24,500)		(43,500)
Total deferred tax liabilities		(404,400)		(521,700)

Net deferred tax assets	$	3,100	$	3,100

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all deferred tax assets will not 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. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. As of December 31, 2019, the Company continues to maintain a valuation allowance against all of its domestic and foreign deferred tax assets, except for its AMT Credit carryforward, which is treated as a refundable attribute under the new tax law.

For the year ended December 31, 2019, the Company has federal and state net operating loss carryforwards totaling $12,988,000 and $12,885,000, respectively, which begin to expire in 2031. The Company also had federal and state tax credit carryovers of $306,000 and $219,000, respectively. The federal and state credits begin to expire in 2027 and 2020, respectively.

The Company files a consolidated federal income tax return. The actual income tax provision differs from applying the Federal statutory income tax rate (21%) to the pre-income tax loss from continuing operations as follows:



	Year Ended
	December 31,
	2019		2018
Tax benefit computed at statutory rate	$	(481,139)	$	(216,791)
Increases (reductions) due to:
Change in valuation allowance		502,900		202,700
State income taxes, net of federal benefit		(19,580)		1,713
Permanent differences		12,348		9,669
Tax credits (federal and state)		—		(7,326)
Differences on prior returns (federal and state)		(14,529)		12,203
Income tax provision	$	—	$	2,168