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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

Note 11. Income Taxes

 

Income tax provision (benefit) for the years ended December 31, 2021 and 2020 is summarized below:

 

   2021   2020 
Current:          
Federal  $-   $- 
State   -    - 
Total   -    - 
Deferred:          
Federal   (1,001,707)   (715,000)
State   (322,293)   (235,000)
Change in valuation allowance   1,324,000    950,000 
Total   -    - 
Provision for income taxes  $-   $- 

 

 

Barfresh food Group Inc.

Notes to Consolidated Financial Statements

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate before provision for income taxes. The sources and tax effect of the differences are as follows:

 

   2021   2020 
Statutory federal income tax rate   21%   21%
State tax   7%   7%
Permanent differences   (15)%   (3)%
Change in valuation allowance   (13)%   (25)%
Total Income tax   -%   -%

 

Components of the net deferred income tax assets at December 31, 2021 and 2020 were as follows:

 

   2021   2020 
Net operating loss carryover  $12,669,000   $11,345,000 
Valuation allowance   (12,669,000)   (11,345,000)
Deferred Tax Assets, Net  $-   $- 

 

ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all of the deferred tax assets will not be recognized. After consideration of all the evidence, both positive and negative, management has determined that a $12,669,000 and $11,345,000 allowance at December 31, 2021 and 2020, respectively, is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. The increase in the valuation allowance for the current period is $1,324,000 resulting for current year tax losses, including the 2021 loss adjusted for the PPP loan forgiveness and the true up of prior year net operating loss carryforwards.

 

As of December 31, 2021, the Company has a net operating loss carry forward to offset future taxable income of approximately $45,272,000, $28,482,000 of which begins to expire in 2033. Net operating loss carry forwards of $16,790,000 may be carried forward indefinitely.