v3.25.2
INCOME TAXES
 12 Months Ended
Mar. 31, 2025
INCOME TAXES  
INCOME TAXES

NOTE 5 – INCOME TAXES

We account for income taxes under ASC 740, Income Taxes. The following table reflects income and loss from continuing operations by location, and the provision for income taxes for the applicable fiscal years ended March 31:

​

​

​

​

​

​

​

​

​

    

2025

    

2024

Loss before income taxes

​

$

(2,750)

​

$

(5,110)

Income tax (benefit) expense

​

 

(2)

​

 

1,932

Net loss

​

$

(2,748)

​

$

(7,042)

​

The components of the income tax provision consist of the following for the fiscal years ended March 31:

​

​

​

​

​

​

​

​

​

    

2025

    

2024

Current:

 

​

  

 

​

  

Federal

​

$

(1)

​

$

—

State

​

 

(1)

​

 

1

Total Current

​

$

(2)

​

$

1

Deferred:

​

 

​

​

 

​

Federal

​

$

—

​

$

2,087

State

​

 

—

​

 

(156)

Total Deferred

​

$

—

​

$

1,931

Income tax (benefit) expense

​

$

(2)

​

$

1,932

​

Our fiscal 2025 and 2024 taxes were measured at the U.S. statutory income tax rate of 21%. A reconciliation between income taxes computed at the U.S. federal statutory rate to the actual tax expense for income taxes reported in the Consolidated Statements of Operations follows for fiscal years ended March 31:

​

​

​

​

​

​

​

​

​

​

    

2025

    

2024

 

U.S. statutory income tax

​

$

(577)

​

$

(1,073)

​

State income tax, net of federal benefit

​

 

159

​

 

(164)

​

Change in valuation allowance

​

​

410

​

​

3,141

​

Other

​

 

6

​

 

28

​

Income tax (benefit) expense

​

$

(2)

​

$

1,932

​

Effective tax rate*

​

 

0.07

%  

 

37.81

%

Effective tax rate is calculated by dividing the income tax provision by loss before income taxes.

The following table summarizes the components of deferred income tax assets and liabilities at March 31:

​

​

​

​

​

​

​

​

​

    

2025

    

2024

Deferred tax assets:

 

​

  

 

​

  

Net operating loss carryforward

​

$

6,056

​

$

6,302

Compensation

​

 

221

​

 

142

Stock based compensation awards

​

​

25

​

​

7

Operating leases

​

​

995

​

​

1,196

Other items not currently deductible

​

 

170

​

 

538

Total deferred tax assets

​

 

7,467

​

 

8,185

Valuation allowance

​

​

(5,722)

​

​

(5,312)

Net deferred tax assets

​

 

1,745

​

 

2,873

Deferred tax liabilities:

​

​

​

​

​

​

Depreciation

​

​

(782)

​

​

(1,563)

Operating leases

​

​

(963)

​

​

(1,157)

Contract accounting methods

​

​

—

​

​

(153)

Total deferred tax liabilities

​

 

(1,745)

​

 

(2,873)

Deferred taxes, net

​

$

—

​

$

—

​

In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. The assessment was based on the weight of negative evidence at the balance sheet date, our recent operating losses and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdictions, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase or a reduction the valuation allowance currently recorded against those deferred tax assets. The valuation allowance on deferred tax assets was $5,722 and $5,312 at March 31, 2025 and 2024, respectively. We believe that it is more likely than not that the benefit from certain NOL carryforwards and other deferred tax assets will not be realized.

At March 31, 2025 we had federal net operating losses of $19,254 which begin to expire in 2034. The Internal Revenue Code provides for a limitation on the annual use of net operating loss carryforwards following certain ownership changes that could limit our ability to utilize these carryforwards on a yearly basis. Also, U.S. tax laws may limit the time during which these loss carryforwards may be applied against future taxes. As such, certain pre-2021 Stadco net operating loss carryforwards available for TechPrecision’s consolidated tax group may be limited, including $9,900 of the total Stadco NOL carryforward available.

We have not accrued any penalties with respect to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. Tax years 2022 and forward remain open for examination.