Entity information:
15. Income Taxes
At December 31, 2017, the Company had federal and state net operating loss carryforwards of $373.7 million and $236.3 million, respectively, available to offset against future taxable income, which expire in 2018 through 2037.
As a result of a change in-control that occurred in the CytRx shareholder base in 2013, approximately $136.8 million in federal net operating loss carryforwards became substantially limited in their annual availability. Management currently believes that the remaining $236.9 million in federal net operating loss carryforwards, and the $236.3 million in state net operating loss carryforwards, are unrestricted.
As of December 31, 2017, CytRx also had research and development tax credits for federal and state purposes of approximately $16.6 million and $21.9 million, respectively, available for offset against future income taxes, which expire in 2022 through 2037. Based on an assessment of all available evidence including, but not limited to, the Company's limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the Company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a 100% deferred tax valuation allowance has been recorded against these assets.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act) was enacted reducing the corporate tax rate from 35% to 21% which is effective on January 1, 2018. The carrying value of the Company's deferred tax assets is also determined by the enacted U.S. corporate income tax rate. Consequently, any changes in the U.S. corporate income tax rate have impacted the carrying value of the Company's deferred tax assets. Under the new corporate income tax rate of 21%, deferred income taxes decreased but there is a corresponding decrease to the valuation allowance. Therefore, the 2017 Tax Act is expected to have no impact on the Company's 2017 earnings. Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company has determined that the $27.3 million of deferred tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities.
The Company implemented ASU 2016-09 during the first quarter of 2017 as stipulated in the FASB guidance for publicly-traded entities. To account for the implementation of ASU 2016-09, the Company accounted for previously unrecognized excess tax benefits by recognizing those benefits. Due to the Company's full valuation allowance, this recognition has no effect on the net accrual after the valuation allowance.
Deferred income taxes reflect the net effect of temporary differences between the financial reporting carrying amounts of assets and liabilities and income tax carrying amounts of assets and liabilities. The components of the Company's deferred tax assets and liabilities, all of which are long-term, are as follows (in thousands):
  
December 31,
 
  
2017
  
2016
 
Deferred tax assets:
      
Net operating loss carryforwards
 
$
66,251
  
$
126,244
 
Tax credit carryforwards
  
33,899
   
29,970
 
Equipment, furnishings and other
  
4,909
   
9,297
 
Total deferred tax assets
  
105,059
   
165,511
 
Deferred tax liabilities
  
—
   
(301
)
Net deferred tax assets
  
105,059
   
165,210
 
Valuation allowance
  
(105,059
)
  
(165,210
)
  
$
—
  
$
—
 
For all years presented, the Company did not recognize any deferred tax assets or liabilities. The net change in valuation allowance for the years ended December 31, 2017 and 2016 was $60.2 million and $21.4 million, respectively.
The provision for income taxes differs from the provision computed by applying the Federal statutory rate to net loss before income taxes as follows (in thousands):
  
Years ended December 31,
 
  
2017
  
2016
  
2015
 
Federal benefit at statutory rate
 
$
(11,895
)
 
$
(17,262
)
 
$
(19,919
)
State income taxes, net of Federal taxes
  
(2,073
)
  
(3,086
)
  
(3,556
)
State credits
  
(506
)
  
(1,031
)
  
(1,324
)
Warrant liabilities
  
(465
)
  
(1,301
)
  
(1,509
)
Other permanent differences
  
11
   
40
   
16
 
Provision related to change in valuation allowance
  
(60,358
)
  
21,601
   
20,142
 
Federal rate adjustment
  
27,314
   
—
   
—
 
NQ Options
  
47
   
—
   
—
 
Current year tax credit
  
(665
)
  
(1,119
)
  
(2,050
)
NOL Adjustments
  
45,521
   
—
   
—
 
Termination/Cancellation of Equity Compensation Awards
  
2,983
   
2,274
   
5,960
 
Return to provision
  
84
   
(118
)
  
2,238
 
Other, net
  
3
   
3
   
3
 
  
$
1
  
$
1
  
$
1
 

There have been no changes to the Company's liability for unrecognized tax benefits during the year ended December 31, 2017.
The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. As of the year ended December 31, 2017, the tax returns for 2013 through 2017 remain open to examination by the Internal Revenue Service and various state tax authorities.
The Company's policy is to recognize any interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of the date of adoption of ASC 740 and the years ended December 31, 2017, 2016 and 2015, the Company had accrued no interest or penalties related to uncertain tax positions.