IDEAYA Biosciences, Inc. Income Taxes Disclosure

7. Income Taxes

The Company did not record a federal or state income tax provision due to its net losses for the years ended December 31, 2025, December 31, 2024 and December 31, 2023. In addition, the Company continues to maintain a full valuation allowance against its net deferred tax assets as the Company believes it is not more likely than not that the benefit will be realized.

The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $31.5 million during the year-ended December 31, 2025 and $69.0 million and during the year ended December 31, 2024.

The Company had net operating loss carryforwards of $145.8 million and $147.5 million available to reduce future taxable income, if any, for federal income tax purposes as of December 31, 2025 and December 31, 2024, respectively. The Company had net operating loss carryforwards of $93.9 million and $93.5 million available to reduce future taxable income, if any, for state income tax purposes. If not utilized, the federal carryforwards of $11.6 million and the state carryforwards of $93.9 million will begin to expire in 2037 and 2036, respectively. The federal net operating loss carryforwards of $134.2 million arising after December 31, 2017 do not expire.

The Company also had federal and state research and development credit carryforwards of $17.1 million and $13.6 million as of December 31, 2025 and $19.8 million and $10.8 million as of December 31, 2024, respectively. The Company had Orphan Drug Credits (“ODC”), related to the orphan drug designation of darovasertib in 2022, of $27.3 million and $8.1 million as of December 31, 2025 and December 31, 2024, respectively. The federal credits will expire starting in 2037 if not utilized, and the state research credit can be carried forward indefinitely.

The Tax Reform Act of 1986 limits the use of net operating loss carryforwards in certain situations where changes occur in the stock ownership of a company. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed a Section 382 analysis through December 31, 2025. The Company has not experienced ownership changes in the current year. Subsequent ownership changes may affect the limitation in future years.

Related to unrecognized tax benefits noted below, the Company accrued no penalties or interest during the years ended December 31, 2025, December 31, 2024 and December 31, 2023.

The Company had $8.8 million and $5.9 million of unrecognized tax benefits as of December 31, 2025 and December 31, 2024, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and in the states of Arizona, California, New Jersey, North Carolina, Pennsylvania, Texas, Utah and Wisconsin. For jurisdictions in which tax filings have been filed, all tax years remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses or credits. The Company’s federal and state income taxes paid, net of refunds, were nil during the years ended December 31, 2025, 2024, and 2023.

In July 2025, Congress passed and the President signed into law H.R. 1, the One Big Beautiful Bill Act (“Tax Act”) which modified certain business tax provisions enacted as a part of the 2017 Tax Cuts and Jobs Act including restoration of 100% bonus depreciation and the ability to expense domestic research and development costs. The Tax Act did not result in a material impact to the Company’s income tax provision or effective tax rate.