EARTHSTONE ENERGY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) A reconciliation of the effective tax rate to the statutory rate for the years ended December 31, 2020 and 2019 is as follows ( in thousands, except percentages ): Years Ended December 31, 2020 2019 U.S. Canada Total U.S. Canada Total Net income (loss) before income taxes $ (29,546) $ —  $ (29,546) $ 3,245  $ —  $ 3,245  Statutory rate 21  % 27  % 21  % 21  % 27  % 21  % Tax expense computed at statutory rate (6,204) —  (6,204) 681  —  681  Noncontrolling interest 3,349  —  3,349  (374) —  (374) Non-deductible general and administrative expenses 1,943  —  1,943  230  —  230  State return to accrual 157  —  157  286  —  286  Refundable tax credits —  —  —  —  —  —  State income taxes, net of Federal benefit 35  —  35  1,285  —  1,285  Valuation allowance 608  —  608  (443) —  (443) State rate change —  —  —  —  —  —  Total income tax (benefit) expense $ (112) $ —  $ (112) $ 1,665  $ —  $ 1,665  Effective tax rate 0.4  % —  % 0.4  % 51.3  % —  % 51.3  % During the year ended December 31, 2020, the Company recorded total income tax benefit of $0.11 million which included (1) deferred income tax benefit for Lynden US of $0.15 million as a result of its share of the distributable income from EEH, (2) deferred income tax benefit for Earthstone of $0.61 million as a result of its share of the distributable loss from EEH, which was offset by a valuation allowance as future realization of the net deferred tax asset cannot be assured and (3) current income tax expense of $0.55 million, offset by deferred income tax benefit of $0.51 million related to the Texas Margin Tax. Lynden Corp incurred no material income or loss, or related income tax expense or benefit, for the year ended December 31, 2020. During the year ended December 31, 2019, the Company recorded total income tax expense of $1.7 million which included (1) deferred income tax expense for Lynden US of $0.1 million as a result of its share of the distributable income from EEH, (2) deferred income tax expense for Earthstone of $0.4 million as a result of its share of the distributable income from EEH, which was used to reduce the valuation allowance recorded against its deferred tax asset as future realization of the net deferred tax asset cannot be assured and (3) deferred income tax expense of $1.6 million related to the Texas Margin Tax. Lynden Corp incurred no material income or loss, or related income tax expense or benefit, for the year ended December 31, 2019.  The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities at December 31, 2020 and 2019 are as follows ( in thousands ): Deferred Tax Assets and Liabilities Years Ended December 31, 2020 2019 Deferred noncurrent income tax assets (liabilities): Oil & gas properties $ 18,929  $ 20,633  Basis difference in subsidiary obligation (2,211) (2,211) Investment in Partnerships (25,760) (31,722) Federal net operating loss carryforward 11,590  14,597  Net deferred noncurrent tax assets 2,548  1,297  Valuation allowance (17,044) (16,451) Net deferred tax liability $ (14,496) $ (15,154) As of December 31, 2020, the Company had a valuation allowance recorded against its deferred tax assets of $17.0 million which is in excess of its net deferred noncurrent tax assets of $2.5 million, as presented above. The Company’s corporate organizational structure requires the filing of two separate consolidated U.S. Federal corporate income tax returns, one separate U.S. Federal partnership income tax return and one Canadian income tax return. As a result, tax attributes of one group cannot be offset by the tax attributes of another. At December 31, 2020, the deferred tax assets and liabilities related to the two U.S. 26