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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 8: INCOME TAXES
The components of income (loss) before income taxes were as follows:
Year ended December 31,
(in thousands)201920202021
Domestic$(104,690)$14,773 $(3,685,936)
Foreign(2,897)(943)1,504 
Income (loss) before income taxes$(107,587)$13,830 $(3,684,432)
The components of the provision for (benefit from) income taxes were as follows:
Year ended December 31,
(in thousands)201920202021
Current:
Federal$(58)$2,780 $(249)
State(295)3,801 4,990 
Foreign— — — 
Total current tax expense (benefit)(353)6,581 4,741 
Deferred:
Federal— — (1,084)
State— — (1,525)
Foreign(665)(200)(132)
Total deferred tax expense (benefit)(665)(200)(2,741)
Total provision for (benefit from) income taxes$(1,018)$6,381 $2,000 
The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows:
Year ended December 31,
(in thousands)201920202021
Federal tax benefit at statutory rate$(22,593)$2,905 $(773,731)
State tax benefit, net of federal benefit(5,491)(862)(131,494)
Foreign rate differential(57)(2)(448)
Share-based compensation(1,221)(2,654)17,338 
Tender offer compensation4,229 3,607 1,640 
Research and development credits(2,104)(10,489)(48,111)
Non-deductible regulatory settlements— 21,000 10,920 
Non-deductible change in convertible notes and warrant— — 429,588 
Permanent differences— 526 322 
Other905 52 367 
Change in valuation allowance25,314 (7,702)495,609 
Total provision for (benefit from) income taxes$(1,018)$6,381 $2,000 
Significant components of our deferred tax assets and liabilities consist of the following:
Year ended December 31,
(in thousands)20202021
Deferred tax assets:
Accruals and other liabilities14,849 $24,319 
Lease liabilities13,794 39,909 
Tax credit carryforwards9,058 81,457 
Net operating loss carryforwards3,141 251,202 
Share-based compensation3,123 134,723 
Other3,386 21,411 
Total deferred tax assets47,351 553,021 
Deferred tax liabilities:
Right of use assets(12,551)(34,182)
Depreciation and amortization(6,965)(22,977)
Total deferred tax liabilities(19,516)(57,159)
Valuation allowance(26,909)(494,902)
Net deferred tax assets$926 $960 
The following is a reconciliation of the beginning and ending amount of the deferred tax asset valuation allowance:
Year ended December 31,
(in thousands)201920202021
Balance at beginning of period$9,631 $35,207 $26,909 
Charged/(credited) to net income25,576 (8,298)470,691 
Charges utilized/(write-offs)— — (2,698)
Balance at end of period$35,207 $26,909 $494,902 
The realization of tax benefits of net deferred assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable.
Based on all available evidence for the year ending December 31, 2021, we believe it is more likely than not that the tax benefits of the remaining U.S. federal and state net deferred tax assets may not be realized, and accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $468.0 million for the year ended December 31, 2021.
As of December 31, 2021, we have $944.3 million of U.S. federal, $823.9 million of state, and $5.1 million of non-U.S. net operating loss carryforwards available to reduce future taxable income. Of the U.S. federal net operating loss carryforwards, $1.0 million will begin to expire in 2037 and the $943.3 million will carryforward indefinitely. Our state net operating losses begin to expire in 2022, while our non-U.S. net operating losses do not expire. We have U.S. federal tax credit carryforwards of $80.8 million that will begin to expire in 2040, if not utilized, and state tax credit carryforwards of $2.2 million that will begin to expire in 2026 and $52.4 million that do not expire.
Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization.
We had unrecognized tax benefits of approximately $7.4 million and $46.2 million as of December 31, 2020 and 2021. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. We record interest and penalties related to unrecognized tax benefits in income tax expenses. There were no interest or penalties during the years ended December 31, 2020 and 2021.
The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Year ended December 31,
20202021
Unrecognized benefit - beginning of period$2,177 $7,420 
Gross increases - current year tax positions4,395 37,879 
Gross increases - prior year tax positions848909
Unrecognized benefit - end of period$7,420 $46,208 
We file in U.S. federal, various state, and foreign jurisdictions. The tax years from 2013 remain open to examination by the U.S. federal and state authorities, due to carryover of unused net operating losses and tax credits. The tax years from 2018 remain open for the most significant foreign jurisdiction.