12. Income Taxes

The provision for income tax expense (benefit) consists of the following:

A reconciliation of income tax expense computed at the federal statutory rate to the provision for income taxes for the years ended December 31, 2022, 2021 and 2020 is as follows:

Significant components of the Company’s deferred tax liabilities and assets are as follows:

Deferred income tax balances reflect the effects of temporary differences between the carrying amount of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.

State operating loss carry forwards for tax purposes will result in future tax benefits of approximately $1,422. These loss carry-forwards began to expire in 2021. The Company evaluated the need to maintain a valuation allowance against certain deferred tax assets. Based on this evaluation, which included a review of recent profitability, future projections of profitability, and future deferred tax liabilities, the Company concluded that a valuation allowance of approximately $1,368 is necessary at December 31, 2022 for the state net operating loss carry-forwards which are likely to expire prior to the Company's ability to use the tax benefit. The Company also carries a valuation allowance for approximately $704 related to non-state net operating loss carry-forwards which are likely to expire prior to the Company’s ability to use the tax benefit.

A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:

The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $1,519 at December 31, 2022. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. Approximately $581 and $466 of accrued interest and penalties is reported as an income tax liability at December 31, 2022 and 2021, respectively. The liability for unrecognized tax benefits is reported in Other Long‑term Liabilities on the Consolidated Balance Sheets at December 31, 2022 and 2021.

The Company files income tax returns in the United States (federal) and various states. Tax years open to examination by tax authorities under the statute of limitations include 2019, 2020 and 2021 for Federal and 2018 through 2021 for most states. Tax returns for the 2022 tax year have not yet been filed.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the year incurred and required taxpayers to amortize them over a period of five years for tax purposes. This mandatory capitalization requirement increases our deferred tax assets and cash tax liabilities.