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.