INCOME TAXES

Income tax expense is comprised of the following (in thousands):



	December 31,
	2017		2016
Federal:
Current	$	455	$	777
Deferred	421		514
	876		1,291
State:
Current	76		108
Deferred	105		63
	181		171

	$	1,057	$	1,462

The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following (in thousands):



	December 31,
	2017					2016
Income taxes at statutory rate	$	1,269		34.0	%	$	1,461		34.0	%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit	136			3.6	%	134			2.7	%
Domestic production activities deduction	—			—	%	(77		)	(1.6	)%
Stock compensation deferred tax asset write-off	—			—	%	25			0.5	%
Deferred true-ups	161			4.3	%	—			—	%
Provision-to-return	152			4.1	%	—			—	%
Rate reduction	(664		)	(17.8	)%	—			—	%
Other	3			0.1	%	(81		)	(1.6	)%

	$	1,057		28.3	%	$	1,462		34.0	%

Deferred tax assets (liabilities) are as follows (in thousands):



	December 31,
	2017			2016
Depreciation	$	(1,185	)	$	(1,404	)
Unrealized losses on investments available for sale	5			15
Retainage	(264		)	—
Allowance for doubtful accounts	52			128
Prepaid expenses	(98		)	—
Vacation accrued	67			106
Deferred income	—			281
State NOL carryforward	48			75
Other	85			35

Net deferred tax liability	$	(1,290	)	$	(764	)

Provisional Amounts

Deferred tax assets and liabilities: The Company remeasured certain deferred tax assets and liabilities based on the federal rate at which they are expected to reverse in the future, which is generally 21%. The Company also remeasured the state rate at which certain deferred tax assets and liabilities are expected to reverse in the future associated with the reduction in the future federal benefit from state deferred tax assets and liabilities from 35% to 21%. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company's deferred tax balance was a tax benefit (in thousands) of $664.