|9 Months Ended|
Sep. 30, 2020
|Income Tax Disclosure [Abstract]|
9. Income Taxes
No provision for income taxes was recorded for the three and nine months ended September 30, 2020 and 2019, respectively. Deferred tax assets generated from the Company’s net operating losses have been fully reserved, as the Company believes it is not more likely than not that the benefit will be realized.
In December 2015, the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) was signed into law, which created several new research and development (“R&D”) tax credit provisions, including allowing qualified small businesses to utilize the R&D credit against the employer’s portion of payroll tax up to a maximum of $250,000 per year. The Company qualified as a small business under the PATH Act for 2016, 2017, 2018 and 2019. During the three and nine months ended September 30, 2020, the Company utilized $70,000 and $334,000, respectively, of R&D tax credits as a reduction of payroll expenses to offset its payroll tax liabilities, compared to $60,000 and $232,000 for the three and nine months ended September 30, 2019, respectively. The remaining R&D tax credits available for future payroll tax liabilities have been recorded as deferred tax assets with a full valuation allowance.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef