Oklo Inc.OKLO
Oklo Inc. Income Taxes Disclosure
Income Taxes
The components of income tax (benefit) expense consist of the following:
As of December 31, | |||||||||||
| Current tax expense: | 2025 | 2024 | |||||||||
| Federal | $ | — | $ | — | |||||||
| State and local | — | 683 | |||||||||
| Total current tax expense | — | 683 | |||||||||
| Deferred tax benefit: | |||||||||||
| Federal | (3,516) | — | |||||||||
| State and local | (1,013) | — | |||||||||
| Total deferred tax benefit | (4,529) | — | |||||||||
| Total income tax (benefit) expense | $ | (4,529) | $ | 683 | |||||||
Significant components of the Company’s deferred taxes are as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 5,599 | $ | 3,078 | |||||||
| R&D tax credit | 10,692 | 2,443 | |||||||||
| Capitalized R&D expenses | 16,039 | 5,617 | |||||||||
| Capitalized start-up expenses | 34,210 | 15,628 | |||||||||
| Advance payment | 5,267 | — | |||||||||
| Operating lease liabilities | 305 | 216 | |||||||||
| Stock-based compensation | 2,598 | 394 | |||||||||
| Other | 15 | 73 | |||||||||
| Accrued expenses | 2,079 | — | |||||||||
| Deferred tax assets | 76,804 | 27,449 | |||||||||
| Valuation allowance | (71,625) | (26,775) | |||||||||
| Total deferred tax assets | 5,179 | 674 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Indefinite-lived intangible assets | (5,794) | — | |||||||||
| Right-of-use assets | (292) | (207) | |||||||||
| Unrealized gain on marketable debt securities | (248) | (467) | |||||||||
| Total deferred tax liabilities | (6,334) | (674) | |||||||||
| Net deferred tax liabilities | $ | (1,155) | $ | — | |||||||
The Company regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history, and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the income tax (benefit) in the period in which such determination is made. Due to the uncertainty surrounding their realization, the Company has recorded a valuation allowance primarily against its deferred tax assets up to certain deferred tax liabilities as of December 31, 2025 and 2024.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law, introducing significant changes to U.S. corporate income tax provisions. The effects of changes in tax laws are recognized in the period of enactment, which were primarily related to amendments to Section 174. The impact of OBBBA on income tax (benefit) expense for the year ended December 31, 2025 was not material.
As of December 31, 2025 and 2024, the Company’s unamortized capitalized R&D expenses of approximately $76,130 and $26,770, respectively, will be amortized in varying amounts through 2034 for tax purposes. As of December 31, 2025 and 2024, the Company capitalized certain start-up costs of approximately $162,370 and $74,040, respectively, that will be amortized, subject to certain limitations, over a 180-month period beginning with the month in which the Company is considered to be in an active trade or business for tax purposes.
As of December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of $23,694 and $9,748 for state and local income tax purposes. Net operating losses for federal purposes of approximately $22,073 do not expire (limited to 80% of taxable income in a given year). As of December 31, 2024, the Company had net operating loss carryforwards for federal income tax purposes of $14,739 and the Company’s state net operating loss carryforwards were not material.
As of December 31, 2025 and 2024, the Company had federal research credit carryforwards of approximately $12,128 and $2,714, respectively. The federal research credit carryforwards will expire at various dates beginning in the year 2035. The Company may be entitled to claim additional state income tax credits for its R&D activities, but these amounts have not yet been determined. Any additional state R&D tax credits generated by the Company would result in an additional deferred tax asset, unless utilized, that would be subject to a full valuation allowance.
The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a Company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“Section 382”). Events which may cause limitations in the amount of
the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the Section 382 and similar state provision.
The Company files income tax returns in the U.S. federal and various state jurisdictions, each of which is subject to differing statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2022 for federal purposes and 2021 for state purposes, except in certain state jurisdictions. However, net operating losses generated in tax years beginning in 2014 remain subject to examination to the extent such losses are utilized in future periods.
The benefit for income taxes differs from the amount obtained by applying the federal statutory income tax rate as follows:
| Years Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | ||||||||||||||||||||
| U.S. federal statutory tax rate | $ | (23,140) | 21.0 | % | $ | (15,316) | 21.0 | % | |||||||||||||||
State and local taxes, net of federal benefit (a) | (1,013) | 0.9 | % | 539 | (0.7) | % | |||||||||||||||||
| Effect of change in tax laws or rates enacted in current period | — | — | % | — | — | % | |||||||||||||||||
| Tax credits | |||||||||||||||||||||||
| R&D tax credits | (9,359) | 8.5 | % | (1,290) | 1.8 | % | |||||||||||||||||
| Change in valuation allowances | 43,952 | (39.9) | % | 16,011 | (21.3) | % | |||||||||||||||||
| Nontaxable and nondeductible items | |||||||||||||||||||||||
| Nondeductible executive compensation | 10,275 | (9.3) | % | 242 | (0.3) | % | |||||||||||||||||
| Change in fair value of simple agreements for future equity | — | — | % | 5,852 | (8.0) | % | |||||||||||||||||
| Transaction costs | — | — | % | (1,555) | 2.1 | % | |||||||||||||||||
| Interest expense | — | — | % | (1,190) | 1.6 | % | |||||||||||||||||
| Stock-based compensation | (26,750) | 24.3 | % | (2,981) | 4.1 | % | |||||||||||||||||
| Other | 342 | (0.3) | % | 100 | (0.8) | % | |||||||||||||||||
| Changes in unrecognized tax benefits | 1,164 | (1.1) | % | 271 | (0.4) | % | |||||||||||||||||
| Effective tax rate | $ | (4,529) | 4.1 | % | $ | 683 | (0.9) | % | |||||||||||||||
(a) State taxes in Idaho and California made up the majority (greater than 50 percent) of the tax effect in this category for the tax years ended December 31, 2025 and 2024, respectively.
The effective tax rate for 2025 is lower than the statutory U.S. federal tax rate primarily due to a full valuation allowance against U.S. deferred tax assets, as well as the impact of stock-based compensation and nondeductible executive compensation.
The following table represents a roll forward of the qualifying accounts consisting of the valuation allowance for deferred tax assets:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Valuation allowance for deferred tax assets - beginning of year | $ | 26,775 | $ | 11,184 | |||||||
| Change in valuation allowance recognized in the provision for federal income taxes for the year | 43,952 | 16,011 | |||||||||
| Change in valuation allowance recognized in provision for state and local income taxes for during the year | 679 | 47 | |||||||||
| Change in valuation allowance recognized to other accounts | 219 | (467) | |||||||||
| Valuation allowance for deferred tax assets - end of year | $ | 71,625 | $ | 26,775 | |||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance at beginning of year | $ | 271 | $ | — | |||||||
| Additions for tax positions taken in prior year | 228 | 142 | |||||||||
| Additions for tax positions related to the current year | 936 | 129 | |||||||||
| Balance at end of year | $ | 1,435 | $ | 271 | |||||||
If the unrecognized tax benefits are fully recognized in the future, there would be no impact to the effective tax rate, and $1,435 would result in adjustments to the valuation allowance. Interest and penalties related to unrecognized tax benefits were insignificant in the period presented.
Income taxes paid consisted of the following:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Federal | $ * | $ | 223 | ||||||||
| California | 2,464 | 550 | |||||||||
| New York City | * | 123 | |||||||||
| Other | * | 11 | |||||||||
| Total | $ | 2,464 | $ | 907 | |||||||
* Represents jurisdictions below for the threshold for the years presented.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
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.