DocGo Inc.DCGO
DocGo Inc. Income Taxes Disclosure
Income Taxes
A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate consists of the following:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Dollars | Percent | Dollars | Percent | Dollars | Percent | ||||||||||||||||||||||||||||||
| U.S. federal statutory income tax rate | $ | (39,374,788) | 21.00 | % | $ | 5,827,290 | 21.00 | % | $ | 3,421,592 | 21.00 | % | |||||||||||||||||||||||
| Domestic federal | |||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Meals and entertainment | 158,754 | (0.08) | % | 226,265 | 0.82 | % | 320,563 | 1.97 | % | ||||||||||||||||||||||||||
| Effect of stock compensation | 1,512,494 | (0.81) | % | 817,237 | 2.95 | % | 2,561,573 | 15.72 | % | ||||||||||||||||||||||||||
| Section 162(m) limitation | 464,020 | (0.26) | % | 646,791 | 2.33 | % | 1,048,370 | 6.43 | % | ||||||||||||||||||||||||||
| Effect of contingent consideration | — | — | % | — | — | % | 300,718 | 1.85 | % | ||||||||||||||||||||||||||
| Other | 9,362 | — | % | 66,567 | 0.24 | % | 63,069 | 0.39 | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | 35,296,122 | (18.82) | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Taxes payable adjustment | 66,155 | (0.04) | % | (1,135,108) | (4.09) | % | 384,371 | 2.36 | % | ||||||||||||||||||||||||||
| Deferred adjustment | 557,561 | (0.30) | % | 2,825,158 | 10.18 | % | (4,846,351) | (29.74) | % | ||||||||||||||||||||||||||
| Noncontrolling interest | 1,836,617 | (0.98) | % | 1,293,705 | 4.66 | % | — | — | % | ||||||||||||||||||||||||||
| Other | (16) | — | % | (406) | — | % | (87,637) | (0.54) | % | ||||||||||||||||||||||||||
| Domestic state and local income taxes, net of federal effect (a) | 5,818,079 | (3.10) | % | 3,317,061 | 11.95 | % | 3,384,775 | 20.77 | % | ||||||||||||||||||||||||||
| Foreign tax effect | |||||||||||||||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Impairment | 2,156,780 | (1.15) | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Other | 5,736 | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | 1,842,587 | (0.98) | % | 4,979,991 | 17.94 | % | (312,671) | (1.92) | % | ||||||||||||||||||||||||||
| Statutory tax rate differences | (373,656) | 0.20 | % | (95,953) | (0.35) | % | 6,593 | 0.04 | % | ||||||||||||||||||||||||||
| Deferred adjustment | (381,082) | 0.20 | % | (4,476,129) | (16.13) | % | — | — | % | ||||||||||||||||||||||||||
| Other | (726,559) | 0.39 | % | 95,953 | 0.35 | % | — | — | % | ||||||||||||||||||||||||||
| Effective income tax rate | $ | 8,868,166 | (4.73) | % | $ | 14,388,422 | 51.85 | % | $ | 6,244,965 | 38.33 | % | |||||||||||||||||||||||
(a) State taxes in New York and local taxes in New York City made up the majority (greater than 50%) of the tax effect of this category for the fiscal years ended December 31, 2023 and December 31, 2025. State taxes in New York, local taxes in New York City, and state taxes in California made up the majority (greater than 50%) of the tax effect of this category for the fiscal year ended December 31, 2024. | |||||||||||||||||||||||||||||||||||
The components of net (loss) income before income tax expense are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net (loss) income before income tax expense: | |||||||||||||||||
| U.S. | $ | (175,480,870) | $ | 30,324,223 | $ | 16,856,334 | |||||||||||
| Foreign | (12,018,119) | (2,575,221) | (563,041) | ||||||||||||||
| Total net (loss) income before income tax expense: | $ | (187,498,989) | $ | 27,749,002 | $ | 16,293,293 | |||||||||||
The components of income tax expense are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current income tax expense: | |||||||||||||||||
| U.S. federal | $ | 346,042 | $ | 6,182,372 | $ | 2,555,164 | |||||||||||
| U.S. state and local | 777,059 | 4,739,545 | 5,671,320 | ||||||||||||||
| 1,123,101 | 10,921,917 | 8,226,484 | |||||||||||||||
| Deferred income tax expense (benefit): | |||||||||||||||||
| U.S. federal | 2,729,737 | 3,250,410 | 1,650,695 | ||||||||||||||
| U.S. state and local | 5,015,328 | 216,095 | (3,256,914) | ||||||||||||||
| Foreign | — | — | (375,300) | ||||||||||||||
| 7,745,065 | 3,466,505 | (1,981,519) | |||||||||||||||
| Total income tax expense: | |||||||||||||||||
| U.S. federal | 3,075,779 | 9,432,782 | 4,205,859 | ||||||||||||||
| U.S. state and local | 5,792,387 | 4,955,640 | 2,414,406 | ||||||||||||||
| Foreign | — | — | (375,300) | ||||||||||||||
| $ | 8,868,166 | $ | 14,388,422 | $ | 6,244,965 | ||||||||||||
Cash paid for income taxes (net of refunds) consist of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. federal | $ | 954,000 | $ | 2,577,271 | $ | 5,452,000 | |||||||||||
| U.S. state and local | |||||||||||||||||
| New York | 3,594,985 | 1,034,331 | 2,082,361 | ||||||||||||||
| New York City | 2,019,803 | 1,848,186 | 1,825,051 | ||||||||||||||
| Other | (86,170) | 421,076 | 916,698 | ||||||||||||||
| Total U.S. state | 5,528,618 | 3,303,593 | 4,824,110 | ||||||||||||||
| Cash paid for income taxes, net of refunds | $ | 6,482,618 | $ | 5,880,864 | $ | 10,276,110 | |||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The temporary differences that give rise to deferred tax assets and liabilities are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Allowance for credit loss | $ | 2,240,224 | $ | 1,519,406 | |||||||
| Accrued expenses | 1,341,387 | 901,403 | |||||||||
| Lease liabilities | 5,954,684 | 6,001,016 | |||||||||
| Intangible assets | 17,324,699 | — | |||||||||
| Stock compensation | 7,438,850 | 5,982,385 | |||||||||
| Investments | 5,179,361 | — | |||||||||
| Research and development expense | 1,934,989 | 1,399,066 | |||||||||
| Net operating loss | 28,485,951 | 8,990,407 | |||||||||
| Charitable contributions | 71,813 | — | |||||||||
| Disallowed interest expense | 351,744 | — | |||||||||
| U.K. capital allowance | 578,387 | 372,011 | |||||||||
| Other | 294,381 | — | |||||||||
| Total deferred tax asset | 71,196,470 | 25,165,694 | |||||||||
| Valuation allowance | (63,639,959) | (6,187,664) | |||||||||
| Deferred income tax assets, net of allowance | 7,556,511 | 18,978,030 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Prepaid expenses | (428,676) | (1,007,405) | |||||||||
| Fixed assets | (816,079) | (1,624,343) | |||||||||
| Right-of-use assets | (5,772,892) | (5,903,840) | |||||||||
| Intangible assets | — | (1,645,161) | |||||||||
| Investments | — | (349,389) | |||||||||
| Other | — | (25,858) | |||||||||
| Total deferred tax liability | (7,017,647) | (10,555,996) | |||||||||
| Deferred tax assets, net of allowance | $ | 538,864 | $ | 8,422,034 | |||||||
The Company has determined, based upon available evidence, that it is more likely than not that all of the net deferred tax asset will not be realized and, accordingly, has provided a valuation allowance against its net deferred tax asset as of December 31, 2025 and 2024.
As of December 31, 2025, 2024 and 2023, the Company had federal net operating loss carryforwards of approximately $47,092,015, $0 and $0, respectively. As of December 31, 2025, 2024, and 2023, the Company had approximately $29,562,703, $24,273,354 and $10,737,510, respectively, of foreign net operating loss carryforwards. As of December 31, 2025, 2024 and 2023, the Company had state net operating loss carryforward of approximately $134,387,803, $36,878,259 and $36,422,543, respectively. The federal net operating loss carryforwards generated after December 31, 2017 of $47,092,015 carry forward indefinitely. State and foreign net operating loss carryforwards generated in the tax years from 2017 to 2020 will begin to expire, if not utilized, by 2040. Utilization of the net operating loss carryforwards may be
subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar provisions.
The difference between the statutory income taxes on the Company’s pre-tax loss and the Company’s effective income tax rate during the years ended December 31, 2025 and 2024 is primarily due to a recorded valuation allowance and other state taxes. The valuation allowance for deferred tax assets as of December 31, 2025 and 2024 was $63,639,959 and $6,187,664, respectively. The net change in the total valuation allowance for the years ended December 31, 2025, and 2024 was an increase of $57,452,295 and $4,979,991, respectively.
In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
The Company recognizes interest accrued to unrecognized tax benefits and penalties as income tax expense. The Company accrued no penalties or interest during the years ended December 31, 2025, 2024, and 2023.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and foreign jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. As of December 31, 2025, open years related to all jurisdictions are 2024, 2023 and 2022. The Company has an on-going tax audit in California as of December 31, 2025.
In July 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as permanent extensions of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company notes that these tax laws did not have a material impact on the Consolidated Financial Statements or the effective income tax rate.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Mar 15, 2022 | |
| 2020 | Mar 30, 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.