b'Included within the applicable income tax for the year ended December 31, 2017 is $686,467 in additional income tax expense as a result of the remeasurement of the net deferred tax asset necessary due to a change in corporate tax rates included in the Tax Cuts and Jobs Act of 2017 (Act). The Act reduced the corporate tax rate from a graduated 34% tax rate to a flat 21% tax rate. As a result, in accordance with generally accepted accounting principles, CNB was required to remeasure the net deferred tax asset as of December 22, 2017 to recognize future tax benefits and liabilities at the newly enacted 21% tax rate.Income taxes reflected in the statements of income are as follows:Years ended December 31,2018 2017Federal: Current $ 54,277 $( 290,615) Deferred404,8971,820,026State: Current166,406 ( 53,205) Deferred49,789 97,115Provision for income taxes $ 675,369 $ 1,573,321 Included in federal deferred income taxes above for the year ended December 31, 2017 is $686,467 due to the change in tax rate as a result of tax legislation as described below.Deferred income taxes reflect the impact of "temporary differences" between the amount of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations.As a result of the Tax Cuts and Jobs Act of 2017, the Bank has recorded a reduction of the deferred tax asset for the year ended December 31, 2017 as indicated in the table below.The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting income, with the income tax provisions in the statements of income:2018 2017Income tax expense at the statutory rate (21% and 34%, respectively) $744,424 $ 1,275,206Increases (decreases) resulting from: Nontaxable interest income, net of non-deductible interest expense(180,732)(362,540) State income taxes, net of federal income tax benefit 113,839(35,182) Life insurance(41,922)(15,247)Effect of change in deferred tax rate-686,467Other 39,760 24,617Provision for income taxes $ 675,369 $ 1,573,321Effective income tax rate 19.05% 41.95%As previously discussed, the effect of change in income tax rates of $686,467 was due to the reduction in income tax rates applied to deferred income taxes as a result of the Tax Cuts and Jobs Act of 2017 which was signed into law on December 22, 2017. Except for the adjustment of the deferred income tax rates, the effective income tax rate for 2017 was 23.65%.Federal and state income tax obligations and refundable taxes are included in the statements of financial condition as other assets totaling $715,988 and $1,148,942 at December 31, 2018 and 2017, respectively. 37'