CHICAGO RIVET & MACHINE CO Income Taxes Disclosure
3. Income Taxes. The provision (benefit) for income tax expense consists of the following:
|
|
2025 |
|
|
2024 |
|
||
Current: |
|
|
|
|
|
|
||
Federal |
|
$ |
— |
|
|
$ |
8,390 |
|
State |
|
|
2,430 |
|
|
|
1,021 |
|
Total Current |
|
|
2,430 |
|
|
|
9,411 |
|
. |
|
|
|
|
|
|
||
Deferred: |
|
|
|
|
|
|
||
Federal |
|
|
(49,427 |
) |
|
|
479,589 |
|
State |
|
|
(48,099 |
) |
|
|
83,226 |
|
Total Deferred |
|
|
(97,526 |
) |
|
|
562,815 |
|
Total Tax (Benefit) Expense |
|
$ |
(95,096 |
) |
|
$ |
572,226 |
|
Income from operations before income taxes for the years ended December 31, 2025 and 2024, respectively, consisted of:
|
|
2025 |
|
|
2024 |
|
||
Domestic |
|
$ |
(1,178,310 |
) |
|
$ |
(5,043,388 |
) |
Foreign |
|
|
- |
|
|
|
- |
|
Total |
|
$ |
(1,178,310 |
) |
|
$ |
(5,043,388 |
) |
The Company adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" on a prospective basis beginning with the year ended December 31, 2025. The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:
|
|
2025 |
|
|||||
|
|
Amount |
|
|
% |
|
||
Expected tax at U.S. statutory rate |
|
$ |
(247,445 |
) |
|
|
21.0 |
|
Permanent differences |
|
|
2,308 |
|
|
|
(0.2 |
) |
Change in valuation allowance - federal |
|
|
185,769 |
|
|
|
(15.8 |
) |
Change in valuation allowance - state |
|
|
(51,904 |
) |
|
|
4.4 |
|
|
|
5,036 |
|
|
|
(0.4 |
) |
|
PTBI return to provision true up |
|
|
11,140 |
|
|
|
(0.9 |
) |
Income tax (benefit) expense |
|
$ |
(95,096 |
) |
|
|
8.1 |
|
|
|
2024 |
|
|||||
|
|
Amount |
|
|
% |
|
||
Expected tax at U.S. statutory rate |
|
$ |
(1,059,111 |
) |
|
|
21.0 |
|
Permanent differences |
|
|
2,315 |
|
|
|
(0.1 |
) |
|
|
(62,695 |
) |
|
|
1.2 |
|
|
Change in valuation allowance - federal |
|
|
1,517,557 |
|
|
|
(30.0 |
) |
Change in valuation allowance - state |
|
|
123,421 |
|
|
|
(2.5 |
) |
State NOL adjustment |
|
|
18,107 |
|
|
|
(0.4 |
) |
Other adjustments |
|
|
32,632 |
|
|
|
(0.6 |
) |
Income tax expense (benefit) |
|
$ |
572,226 |
|
|
|
(11.4 |
) |
Pennsylvania and Michigan make up 50% or more of the effect of the state and local income tax category. Michigan represents ($27,279) and Pennsylvania represents ($11,215).
Disclosure for income taxes paid net of refunds for the years ended December 31, 2025 and 2024 are as follows :
|
|
2025 |
|
|
2024 |
|
||
Federal |
|
$ |
45,000 |
|
|
$ |
— |
|
State (Massachusetts) |
|
|
1,289 |
|
|
|
— |
|
Total |
|
$ |
46,289 |
|
|
$ |
— |
|
The deferred tax assets (liabilities) consist of the following:
|
|
2025 |
|
|
2024 |
|
||
Depreciation and amortization |
|
$ |
(1,031,650 |
) |
|
$ |
(1,180,931 |
) |
Inventory |
|
|
143,419 |
|
|
|
160,228 |
|
Accrued vacation |
|
|
79,370 |
|
|
|
63,692 |
|
Allowance for credit losses |
|
|
34,466 |
|
|
|
43,999 |
|
Net operating losses |
|
|
2,381,859 |
|
|
|
2,221,882 |
|
Other, net |
|
|
162,651 |
|
|
|
229,854 |
|
Gross deferred tax assets |
|
$ |
1,770,115 |
|
|
$ |
1,538,724 |
|
Valuation allowance |
|
|
(1,910,461 |
) |
|
|
(1,776,596 |
) |
Net deferred tax (liabilities) assets |
|
$ |
(140,346 |
) |
|
$ |
(237,872 |
) |
At December 31, 2025, the Company had federal net operating loss carryforwards of approximately $10,275,000. The net operating loss carryforwards are not subject to expiration, however are subject to annual utilization limitations for U.S. federal income tax purposes. At December 31, 2025, the Company had state net operating loss carryforwards of approximately $3,721,000, some of which are subject to expiration. The Company believes it is more-likely-than-not that its deferred tax assets will not be fully realized, based primarily on cumulative losses over the prior 3-year period. The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions. The Company has recorded a valuation allowance against its deferred tax assets, including indefinite‑lived net operating loss carryforwards. Deferred tax assets and liabilities are netted by jurisdiction, resulting in a net deferred tax liability asset recorded on the Consolidated Balance Sheets.
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025, (known as the "One Big Beautiful Bill Act" or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions. The most notable change for the Company will be the reintroduction of 100% bonus depreciation, whereby the Company can immediately deduct 100% of eligible fixed asset purchases for tax purposes in year one. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Mar 21, 2022 | |
| 2020 | Mar 19, 2021 | |
| 2019 | Mar 20, 2020 | |
| 2018 | Mar 20, 2019 | |
| 2017 | Mar 20, 2018 | |
| 2016 | Mar 20, 2017 | |
| 2015 | Mar 21, 2016 | |
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.