11. INCOME TAXES

The provision (benefit) for income taxes on continuing operations are as follows:


	2018			2017
Current	$	0		$	54
Deferred		(345	)		(566	)

Total income tax expense (benefit)	$	(345	)	$	(512	)

Net deferred income tax assets recorded in the consolidated balance sheets are as follows:


	June 30,
	2018			2017
Net operating loss carryforward	$	6,367		$	7,751
Depreciation expense		(97	)		(255	)
Allowances for receivables		111			153
Accrued expenses		617			963
Intangible assets		1,185			2,218
Pension liabilities		132			231
Other		58			59

		8,373			11,120

Less valuation allowance		(8,373	)		(11,120	)

Net deferred income tax assets	$	0		$	0

The differences between income taxes on continuing operations at the Federal statutory rate and the effective tax rate were as follows:


	2018			2017
Income tax benefit at Federal statutory rate	$	(407	)	$	(840	)
Changes in valuation allowance—continuing operations		(2,889	)		468
U.S. state income taxes, net of federal benefit		1			(154	)
Deferred tax rate changes		2,971			0
Other		(21	)		16

Total income tax benefit—continuing operations	$	(345	)	$	(512	)

In accordance with the Financial Accounting Standards Board Accounting Standards Codification (‘ASC”) 740, we evaluate our deferred taxes quarterly to determine if adjustments to our valuation allowance are required based on the consideration of available positive and negative evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. Our evaluation considers, among other factors, our historical operating results, our expectation of future results of operations, the duration of applicable statuary carryforward periods and conditions of the healthcare industry. The ultimate realization of our deferred tax assets depends primarily on our ability to generate future taxable income during the periods in which the related temporary differences in the financial basis and the tax basis of the assets become deductible. The value of our deferred tax assets will depend on applicable income tax rates.

The Tax Cut and Jobs Act (“TCJA”) was enacted on December 22, 2017. Under ASC 740, the impact of changes in tax law must be recorded in the financial statements in the reporting period that included the date of enactment. However, the SEC and the FASB both recognize that the magnitude of this law change will require extensive analysis and calculations to conform to the new provisions. The SEC issued Staff Accounting Bulletin (“SAB”) 118 on December 22, 2017. SAB 118 provides registrants with guidance on when and how to report the impact of the law change when not all necessary information is available.

At June 30, 2018, consistent with the above processes, we evaluated the need for a valuation allowance against our deferred tax assets and determined that it was more likely than not that only our federal alternative minimum tax (“AMT”) tax credits of $305 would be realized. The AMT credit represents the amount calculated in the Company’s federal income tax return for the year ended June 30, 2017. Under TCJA, AMT tax credits will now become refundable in conjunction with the repeal of the corporate AMT. For tax years beginning after December 31, 2017 and before January 1, 2022, the AMT credit is refundable in an amount equal to 50% (100% for the 2021 tax year) of the excess of the credit for the tax year over the amount of the credit allowable for the year against regular tax liability. This results in the Company receiving its entire AMT credit of $305 as a refund no later than fiscal 2022 and as such a valuation allowance is no longer needed for the AMT credit carryforward and is recorded as a long-term tax receivable in the June 30, 2018 balance sheet. However, in accordance with ASC 740, we recognized a valuation allowance of $8,373 against all other net deferred tax asset items at June 30, 2018. We conducted our evaluation by considering available positive and negative evidence to determine our ability to realize our deferred tax assets. In our evaluation, we gave more significant weight to evidence that was objective in nature as compared to subjective evidence. Also, more significant weight was given to evidence that directly related to our current financial performance as compared to less current evidence and future plans.

The principal negative evidence that led us to determine at June 30, 2018 that $8,373 of the net deferred tax assets resulting from non-AMT credit carryforwards should have full valuation allowances was the three-year cumulative pre-tax loss as well as the underlying negative business conditions for rural healthcare businesses in which our Healthcare Services Segment businesses operate.

For Federal income tax purposes, at June 30, 2018, the Company had approximately $14,600 of estimated net operating loss carry-forwards available for use in future years subject to the limitations of the provisions of Internal Revenue Code Section 382. These net operating loss carryforwards expire in 2023 through 2043. With the enactment of TCJA, Federal net operating loss carryforwards generated in taxable years ending after December 31, 2017 now have no expiration date. The Company’s returns for the periods prior to the fiscal year ended June 30, 2015 are no longer subject to potential federal and state income tax examination.