Gevo, Inc. Income Taxes Disclosure

20. Income Taxes

For financial reporting purpose, income before income taxes includes the following components (in thousands):

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The following table sets forth reconciling items from income tax computed at the statutory federal rate (in thousands):

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The decrease from the federal statutory rate for the year ended December 31, 2025 is primarily due to the movement in officers’ compensation, stock-based compensation, tax credit transactions, and valuation allowance. The states that contribute to the majority (greater than 50%) of the tax effect include Minnesota and California for 2025, Minnesota and South Carolina for 2024.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in future taxable income or deductible expenses.

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the Company’s net deferred tax assets and liabilities (in thousands):

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The Company has Federal net operating loss at December 31,2025 and 2024 of approximately $328.2 million and $238.5 million, respectively, available to offset future income for income tax reporting purposes. Of our Federal net operating loss carryovers as December 31, 2025, $1.5 million is expiring in year 2037 and $326.7 million has indefinite carryforward periods. Other than the $1.5 million generated in year 2017 and expiring in year 2037, the rest of the loss utilization is limited to 80% of taxable income in the future years. The Company has state net operating loss carryovers as December 31,2025 and 2024 of approximately $295.3 million and $208.6 million. Of the state net operating loss carryovers, $270.1 million would expire between the years 2033 and 2045 and $25.5 million has indefinite carryforward periods.

Section 382 of the Code limits the use of NOL carryforwards, which includes Section 163(j) interest expense carryforwards and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. The Company experienced ownership changes which resulted in a limitation applied to their net operating losses and Section 163(j) interest expense carryforwards. The annual limitation may result in the expiration of net operating losses and interest expense carryforwards before their utilization and our ability to offset future income with our tax attributes.

Based on management’s review of both the positive and negative evidence, which includes our historical operating performance, reported cumulative net losses since inception and difficulty in accurately forecasting results, we have concluded that it is more likely than not that we will not be able to realize all of our U.S. deferred tax assets. Therefore, we have provided a full valuation allowance against deferred tax assets as of December 31, 2025 and 2024, respectively.

The following presents the changes in valuation allowance (in thousands):

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The Company had no significant uncertain tax positions as of December 31, 2025 and 2024. The Company did not incur any interest or penalties related to income taxes during the years ended December 31, 2025 and 2024. The Company’s income taxes are not currently under audit in any jurisdiction. As of December 31, 2025, tax years 2017 and forward are subject to examination in federal and state jurisdictions, with certain exceptions for state jurisdictions with longer statute of limitation periods.

The following table sets forth the cash taxes paid (in thousands):

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