CURIS INCCRIS
CURIS INC Income Taxes Disclosure
Income Taxes
For the years ended December 31, 2025 and 2024, the Company did not record any federal or state income tax expense given its continued operating losses, all of which were attributable to the United States.
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 for the years ended December 31, 2025 and 2024 are as follows:
| For the Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | ||||||||||||||||||||
| U.S. federal statutory tax rate | $ | (1,591) | 21.0 | % | $ | (9,103) | 21.0 | % | |||||||||||||||
| Tax credits: | |||||||||||||||||||||||
| Federal research and development credits | (692) | 9.1 | % | (1,606) | 3.7 | % | |||||||||||||||||
| Federal orphan drug credits | (2,534) | 33.5 | % | (1,902) | 4.4 | % | |||||||||||||||||
| Changes in valuation allowances | 4,348 | (57.5) | % | 12,016 | (27.8) | % | |||||||||||||||||
| Nontaxable or nondeductible items: | |||||||||||||||||||||||
| Stock-based compensation | 435 | (5.7) | % | 742 | (1.7) | % | |||||||||||||||||
| Other permanent differences | 33 | (0.4) | % | 41 | (0.1) | % | |||||||||||||||||
| Changes in unrecognized tax benefits | — | — | % | — | — | % | |||||||||||||||||
| Other | 1 | — | % | (188) | 0.5 | % | |||||||||||||||||
| Effective income tax rate | $ | — | — | % | $ | — | — | % | |||||||||||||||
The principal components of the Company’s deferred tax assets at December 31, 2025 and December 31, 2024, respectively, are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| NOL carryforwards | $ | 123,691 | $ | 104,122 | |||||||
| Research and development tax credit carryforwards | 18,336 | 18,220 | |||||||||
| Orphan drug tax credit carryforwards | 29,419 | 26,885 | |||||||||
| Depreciation and amortization | 3,606 | 4,597 | |||||||||
| Capitalized research and development expenditures | 30,682 | 41,283 | |||||||||
| Stock options | 6,040 | 5,571 | |||||||||
| Accrued expenses and other | 112 | 154 | |||||||||
| Oberland agreement | — | 9,336 | |||||||||
| Lease liability | 438 | 807 | |||||||||
| Total gross deferred tax asset | 212,324 | 210,975 | |||||||||
| Valuation allowance | (211,813) | (210,112) | |||||||||
| Net deferred tax asset | $ | 511 | $ | 863 | |||||||
| Deferred tax liabilities: | |||||||||||
| Right of use asset | (511) | (863) | |||||||||
| Total gross deferred tax liabilities | $ | (511) | $ | (863) | |||||||
| Net deferred tax assets (liabilities) | $ | — | $ | — | |||||||
For the year ended December 31, 2025, the Company did not have any material cash payments or refunds for income taxes.
As of December 31, 2025, the Company had U.S. federal tax-effected net operating loss carryforwards of $99.1 million, of which $30.1 million will expire in years 2026 through 2037 and the remainder do not expire but are subject to 80% limitation. As of December 31, 2025, the Company had state net operating loss carryforwards of $24.6 million that will expire between years 2033 and 2044.
As of December 31, 2025 and 2024, the Company had federal research and development credit carryforwards of $14.1 million and $14.0 million, respectively. The credits will expire in the years 2026 through 2044. As of December 31, 2025 and 2024, the Company had state research and development credit carryforwards of $4.3 million and $4.2 million, respectively. The credits will expire in the years 2026 through 2039, unless previously utilized.
As of December 31, 2025 and 2024, the Company had orphan drug tax credit carryforwards of $29.4 million and $26.9 million, respectively. These credits, if any, relate to qualified expenses incurred for fimepinostat and emavusertib since receiving the Orphan Drug designation. The credits will expire in the years 2035 through 2044.
The One Big Beautiful Bill Act (“OBBBA”), passed July 4, 2025, permanently suspends the requirement under Section 174 of the Internal Revenue Code to capitalize and amortize domestic research and development ("R&D") expenditures paid or incurred. For tax years beginning after December 31, 2024, companies can elect to currently expense R&D amounts incurred in the U.S. In addition, all taxpayers are permitted to make an election to accelerate the deductions for unamortized domestic R&D expenses that were capitalized after December 31, 2021 and before January 1, 2025 over a one or two-year period, beginning with the taxpayer’s first tax year beginning after December 31, 2024 or allow these capitalized expenses to amortize over their remaining lives. The Company plans to amortize the remaining domestic R&D expenses which have been previously capitalized. In addition, the Company will currently expense domestic R&D costs beginning in the 2025 tax year and continue to capitalize foreign R&D costs over fifteen years.
The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, and has determined that it is more likely than not that the Company will not recognize the benefits of the deferred tax assets. Accordingly, the Company had a valuation allowance of approximately $211.8 million and $210.1 million as of December 31, 2025 and 2024, respectively. The valuation allowance increased approximately $1.7 million during the year ended December 31, 2025 and primarily related to generated net operating losses and credits.
Utilization of the NOL may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company completed a §382 study in 2019 and determined no ownership changes have occurred and no limitation on NOLs through December 31, 2018. There could be additional ownership changes in the future, which may result in additional limitations in the utilization of the carryforward NOLs and credits, and the Company does not expect to have any taxable income for the foreseeable future.
An individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. At December 31, 2025 and 2024, the Company had no unrecognized tax benefits. The Company has not, as yet, conducted a study of its R&D credit carryforwards. This study may result in an adjustment to the Company’s R&D credit carryforwards, however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position under FASB Codification Topic 740 Income Taxes. A full valuation allowance has been provided against the Company’s R&D credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss if an adjustment were required.
As of December 31, 2025, the Company is generally no longer subject to examination by taxing authorities for years prior to 2021. However, NOLs and credits in the United States may be subject to adjustments by taxing authorities in future years in which they are utilized. The Company is currently not under examination by the IRS or any other jurisdictions for any tax years. The Company recognizes both accrued interest and penalties related to unrecognized benefits in income tax expense. The Company has not recorded any interest or penalties on any unrecognized tax benefits since its inception.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Mar 13, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Mar 16, 2021 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.