Corvus Pharmaceuticals, Inc. Income Taxes Disclosure

13. Income Taxes

The components of loss before income tax is as follows (in thousands):

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During the years ended December 31, 2025, 2024 and 2023, the Company recorded no income tax benefits for the net operating losses (“NOLs”) incurred due to the uncertainty of realizing a benefit from those items.

A reconciliation of the Company’s effective tax rate to the U.S. Federal statutory rate is as follows:

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The effective tax rate is different from the federal statutory tax rate primarily due to a valuation allowance against deferred tax assets as a result of the Company's history of losses.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

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The Company did not make any income tax payments during the year ended December 31, 2025.

The principal components of the Company’s net deferred tax assets are as follows (in thousands):

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The Company recorded a valuation allowance against its deferred tax assets at December 31, 2025 and 2024 because Company management believed that it was more likely than not that these assets would not be fully realized in the future. The valuation allowance increased by approximately $11.6 million and $7.6 million for the years ended December 31, 2025 and 2024, respectively. Changes in the valuation allowance for deferred tax assets relate primarily to the increase in the Company’s net operating loss carryforward.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA introduced multiple U.S. federal income tax changes, including the deductibility of domestic research and development expenses, deductibility of certain property additions and limitations on interest expense deduction. The Company has evaluated the enactment of the OBBBA and continues to assess the detailed impacts of its provision. The effects of this provision have been reflected in the Company’s income tax provision.

As of December 31, 2025, the Company had federal NOL carryforwards of approximately $285.9 million and state NOL carryforwards of approximately $353.7 million which are available to reduce future taxable income. The NOLs will begin to expire in 2035, if not utilized. Utilization of the net operating loss carryforwards are subject to

various limitations due to the ownership change limitations provided by Internal Revenue Code (“IRC”) Section 382 and similar state provisions.

As of December 31, 2025, the Company also had $11.1 million of federal research and development tax credit, $1.5 million of federal orphan drug credit, and $5.8 million of state research and development tax credit carryforwards available to reduce future income taxes. The federal research and development tax credits will begin to expire 2036 and orphan drug credits will begin to expire 2045, if not utilized. The state research and development tax credits have no expiration date.

U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. This excess totaled approximately $11.0 million as of December 31, 2025, which will be indefinitely reinvested; deferred income taxes have not been provided on such investments in foreign subsidiaries.

As of December 31, 2025, the Company had unrecognized tax benefits (“UTBs”) of approximately $13.5 million. All of the deferred tax assets associated with these UTBs are fully offset by a valuation allowance. The following table summarizes the activity related to UTBs:

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The Company follows the provisions of ASC 740, Accounting for Income Taxes, and the accounting guidance related to accounting for uncertainty in income taxes. The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities. None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate. The Company will recognize both accrued interest and penalties related to unrecognized benefits in income tax expense. Management determined that no accrual for interest or penalties was required as of December 31, 2025, 2024 and 2023.

The Company currently has no federal or state tax examinations in progress nor has it had any federal or state examinations since inception. As a result of the Company’s net operating loss carryforwards, all of its tax years are subject to federal, state and foreign tax examinations.