v3.26.1
Income Taxes
 9 Months Ended
Jan. 31, 2026
Income Taxes [Abstract]  
INCOME TAXES

NOTE 11 — INCOME TAXES

 

Marwynn is a Nevada holding company subject to 21% corporate federal income tax rate. There is no state income tax rate because no state income tax is levied in Nevada. Marwynn is a holding company and does not have active operations as of January 31, 2026.

 

FuAn and EcoLoopX were incorporated in the State of California, and are subject to 21% corporate federal income tax rate and 8.84% California state income tax rate. Marwynn, FuAn and EcoLoopX file separate corporate income tax returns instead of a consolidated income tax return.

 

For the three months ended January 31, 2026, and 2025, the provision for income taxes consisted of the following:

 

   Three months
ended
January 31,
2026
(unaudited)		   Three months
ended
January 31,
2025
(unaudited)		 
Current:        
Federal income tax expense  $6,045   $818 
State income tax expense   3,946    756 
Deferred:          
Federal income tax expense   2,227    
—
 
State income tax expense   
—
    
—
 
Total income tax expense  $12,218   $1,574 

The following table reconciles the Company’s effective income tax rate for the three months ended January 31, 2026 and 2025:

 

   Three months
ended
January 31,
2026
(unaudited)		   Three months
ended
January 31,
2025
(unaudited)		 
Federal statutory rate   (21.0)%   21.0%
State statutory rate, net of effect of state income tax deductible to federal income tax   (6.88)%   6.98%
Permanent difference – penalties, interest, and others   0.31%   2.71%
Valuation allowance   29.85%   (28.77)%
Effective tax rate   2.28%   1.92%

  

For the nine months ended January 31, 2026, and 2025, the provision for income taxes consisted of the following:

 

   Nine months
ended
January 31,
2026
(unaudited)		   Nine months
ended
January 31,
2025
(unaudited)		 
Current:        
Federal income tax expense  $7,699   $2,427 
State income tax expense   5,475    2,241 
Deferred:          
Federal income tax expense   2,227    
—
 
State income tax expense   
—
    
—
 
Total income tax expense  $15,401   $4,668 

 

The following table reconciles the Company’s effective income tax rate for the nine months ended January 31, 2026 and 2025:

 

   Nine months
ended
January 31,
2026
(unaudited)		   Nine months
ended
January 31,
2025
(unaudited)		 
Federal statutory rate   (21.0)%   (21.0)%
State statutory rate, net of effect of state income tax deductible to federal income tax   (6.98)%   (6.98)%
Permanent difference – penalties, interest, and others   0.15%   1.37%
Valuation allowance   28.27%   27.28%
Effective tax rate   0.44%   0.67%

Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are comprised of the following:

 

   January 31,
2026
(unaudited)		   April 30,
2025		 
Deferred tax assets:        
Operating lease liabilities, net of ROU  $127   $303 
Depreciation   3,055    
-
 
Bad debt expense   9,187    
-
 
NOL   2,191,384    122,022 
Valuation allowance   (2,203,753)   (120,098)
Deferred tax assets, net  $
-
   $2,227 

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of January 31, 2026 and April 30, 2025, the Company had $16,899 and $12,131 accrued interest and penalties related to understated income tax payments, respectively. For the three months ended January 31, 2026 and 2025, the Company recorded $1,585 and $1,574 of interest and penalties related to understated income tax payments, respectively. For the nine months ended January 31, 2026 and 2025, the Company recorded $4,768 and $4,668 of interest and penalties related to understated income tax payments, respectively.