Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
During the years ended December 31, 2022, 2021 and 2020, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each year, due to its uncertainty of realizing a benefit from those items.
All of the Company’s operating losses since inception have been generated in the United States.
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:
Year ended
December 31,
20222021
Federal statutory income tax rate(21.0)%(21.0)%
State taxes, net of federal benefit(6.0)(6.2)
Federal and state research and development tax credits(5.3)(6.4)
Stock‑based compensation expense0.5 (1.6)
Section 162(m) compensation deduction limitation0.1 1.6 
Other0.1 (0.4)
Increase in deferred tax asset valuation allowance31.6 34.0 
Effective income tax rate— %— %

Net deferred tax assets consisted of the following (in thousands):

December 31,
20222021
Deferred tax assets:
Net operating loss carryforwards$159,691 $145,990 
Research and development tax credit carryforwards45,478 36,161 
Accrued expenses105 2,137 
Capitalized intellectual property costs2,051 1,746 
Capitalized research and development expense32,007 86 
Operating lease liabilities301 10,194 
Stock‑based compensation expense24,454 21,483 
Depreciation74 — 
Total deferred tax assets264,161 217,797 
Deferred tax liabilities:
Operating lease assets(732)(9,590)
Depreciation and other— (1,500)
Total deferred tax liabilities(732)(11,090)
Valuation allowance263,429 206,707 
Net deferred tax assets$— $— 
As of December 31, 2022, the Company had U.S. federal and state net operating loss (“NOL”) carryforwards of $584.8 million and $583.6 million, respectively, which may be available to offset future taxable income. The federal NOLs include $37.2 million which expire at various dates through 2037 and $547.6 million which carryforward indefinitely. The state NOLs expire at various dates through 2042. As of December 31, 2022, the Company also had U.S. federal and state research and development tax credit carryforwards of $29.5 million and $19.9 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2034 and 2026, respectively. During the year ended December 31, 2022, deferred tax assets, before valuation allowance, increased by approximately $46.4 million mainly due to the operating loss incurred by the Company during that period and the capitalization of research and development expenses.
Utilization of the U.S. federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred
or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.
The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2022 and 2021. Management reevaluates the positive and negative evidence at each reporting period.
Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022, 2021 and 2020 related primarily to the increase in net operating loss carryforwards and research and development tax credit carryforwards and were as follows (in thousands):
Year ended December 31,
202220212020
Valuation allowance as of beginning of year$206,707$139,877$85,884
Decreases recorded as benefit to income tax provision———
Increases recorded to income tax provision56,72266,83053,993
Valuation allowance as of end of year$263,429$206,707$139,877

As of December 31, 2022 and 2021, the Company had no recorded amounts for unrecognized tax benefits. The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations and comprehensive loss. The Company files income tax returns in the U.S., Massachusetts and Rhode Island, as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company is open to future tax examination under statute from 2016 to the present; however, carryforward attributes that were generated prior to January 1, 2016 may still be adjusted upon examination by federal, state or local tax authorities if they either have been or will be used in a future period.