Income Taxes

12 Months Ended

Dec. 31, 2024

Note 13 – Income Taxes

At December 31, 2024, and 2023, the significant components of the deferred tax assets are summarized below:

	2024			2023

Approximate net operating loss carry forwards	$	16,036,000		$	15,927,000

Deferred tax assets:
Federal net operating loss	$	3,367,515		$	3,344,643
State net operating loss		1,116,797			1,086,735
Tax credit		49,740			49,740
Goodwill		(148,373	)		(148,373	)
Total deferred tax assets		4,385,679			4,332,745
Less valuation allowance		(4,385,679	)		(4,332,745	)
	$	-		$	-

The valuation allowance increased by $52,934 in 2024 and increased by $1,553,998 in 2023. The Company generated additional net operating losses for the twelve months ended December 31, 2024, of $109,000. The valuation allowance in 2024 was adjusted to true-up to the tax returns as filed through December 31, 2023. The Company’s remaining tax credit carryforwards of $49,740 begin to expire in 2027 and its net operating loss carryforward of approximately $16,036,000 begins to expire in 2027.

Income tax expense reflected in the consolidated statements of income consist of the following for 2024 and 2023:

	2024		2023
Current
Federal	$	-	$	-
State		-		-
		-		-
Deferred
Federal		-		-
State		-		-
		-		-
Income tax expense	$	-	$	-

The reconciliation of the effective income tax rate to the federal statutory rate for the years ended December 31, 2024, and 2023 is as follows:

	2024			2023

Federal income tax rate		21.0	%		21.0	%
State tax, net of federal benefit		6.0	%		6.0	%
Net operating losses		-27.5	%		-27.5	%
Permanent differences		-1.0	%		-0.0	%
Amortization of goodwill		0.0	%		0.3	%
Effective income tax rate		0.0	%		0.0	%

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2019.

The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations. As of December 31, 2024, and 2023 penalties and interest accrued on unpaid payroll taxes were $72,953 and $117,154, respectively.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

US NUCLEAR CORP. 10-K