The provision for income tax expense consisted of the following for the years ended December 31:

On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the "Act") was signed into law. Among other things, the Act reduces the Company's corporate federal tax rate from 34% to 21% effective January 1, 2018.  As a result, the Company is required to re-measure, through income tax expense, our deferred tax assets and liabilities using the enacted rate at which management expects them to be recovered or settled. The re-measurement of the Company's net deferred tax asset resulted in additional income tax expense of approximately $1,680.

The Company early adopted ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) as of and for the period ending December 31, 2017.  As a result, the Company reclassified from retained earnings to accumulated other comprehensive income the stranded tax effects resulting from the newly enacted federal corporate tax rate of 21%.  See Note (1)(r) for more information.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 consisted of:

Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are deductible, management believed it is more-likely-than-not the Company will realize the benefits of these deductible differences.

 

At December 31, 2017, the Company had no state net operating loss carry forwards and no federal tax credit carry forwards.

 

A reconciliation of income taxes computed at the federal statutory rate of 34% and the provision for income taxes for the years ended December 31, 2017, 2016 and 2015 is as follows:

Accounting for Uncertainty in Income Taxes

The Company had unrecognized tax benefits of $0 and $5 for the years ended December 31, 2017 and December 31, 2016, respectively.  The Company recognized a change in unrecognized tax benefits during 2017 and 2016 of $5 and $7 due to the expiration of a statute of limitations and other gross decreases, respectively.  The Company had no significant uncertain tax positions as of December 31, 2017.  The Company does not anticipate any significant increase or decrease in unrecognized tax benefits during 2018.  If recognized, the entire amount of the unrecognized tax benefits would affect the effective tax rate.

The Company classifies interest and penalties as a component of the provision for income taxes.  At December 31, 2017, there were no unrecognized interest and penalties.  The tax years ended December 31, 2016, 2015, and 2014 remain subject to examination by the Internal Revenue Service.  The tax years ended December 31, 2016, 2015, 2014, and 2013 remain subject to examination by the California Franchise Tax Board.  The deductibility of these tax positions will be determined through examination by the appropriate tax authorities or the expiration of the tax statute of limitations.