The Company files income tax returns in the U.S. federal jurisdiction and in Indiana. With a few exceptions, the Company is no longer subject to U.S. federal or state examinations by tax authorities for years before 2014.

A cumulative net deferred tax asset is included in other assets. The components of the asset are as follows:

On December 22, 2017, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act, which significantly changes the existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21%, as well as other changes. As a result of enactment of the legislation, the Company incurred additional one-time income tax expense of $102,000 during the fourth quarter of 2017, primarily related to the remeasurement of certain deferred tax assets and liabilities. Included in this additional one-time income tax expense of $102,000 is income tax expense of $65,000 related to the adjustment of the deferred tax asset for net unrealized losses on available-for-sale securities.

During 2017, the remaining 2012 charitable contribution carryover expired, with a portion of the carryover not being recognized for income tax purposes. As a result, the Company has relieved the related valuation allowance, established in 2012, for the expired deferred tax asset.

Retained earnings at December 31, 2017 and 2016 include approximately $3,136,000 for which no deferred income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions as of December 31, 1987 for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which income would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $659,000, and $1,066,000 for the years ended December 31, 2017 and 2016 respectively.