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Note L - Income Taxes
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
NOTE L — INCOME TAXES
 
Due to Milestone Scientific's history of operating losses, a full valuation allowances have been provided for all of Milestone Scientific's deferred tax assets.  At
December 31, 2020
and
2019,
no
recognition was given to the utilization of the remaining net operating loss carry forwards in each of these periods.
 
Deferred tax attributes resulting from differences between financial accounting amounts and tax bases of assets and liabilities at
December 31, 2020
and
2019
are as follows:     
 
   
2020
    
2019
  
                 
Allowance for Doubtful Accounts   $
2,000
     $
2,000
  
Warranty Reserve    
5,000
      
5,000
  
Impaired Assets    
-
      
-
  
Inventory Reserve    
110,000
      
178,000
  
Deferred Officer's Compensation    
816,000
      
820,000
  
Depreciation and Amortization    
(67,000
 )    
(103,000
 )
Net Operating Loss Carryforwards
    
17,993,000
      
16,504,000
  
Tax Credits    
416,000
      
384,000
  
Other    
10,000
      
(28,000
 )
Subtotal
    
19,285,000
      
17,762,000
  
Valuation allowance
    
(19,285,000
 )    
(17,762,000
 )
Non-current deferred tax asset
    
-
      
-
  
                 
 
As of
December 31, 2020
federal net operating loss carry-forwards are approximately
$66,000,000.
  As of
December 31, 2019,
Milestone Scientific has federal net operating loss carry-forwards of approximately
$59,000,000,
which is comprised solely of losses attributable Milestone Scientific and its subsidiaries. Net operating losses generated before
December 31, 2017
will be available to offset future income, if any, through
December 2037. 
During
2020
and
2019
approximately
$3.4
million and
$4.5
million of net operating losses expired, respectively.  Net operating losses generated in
2018
or after can be carried forward
indefinitely. 
         
State net operating losses were approximately
$56,300,000
  and
56,700,000
for the periods ended
December 31, 2020
and
2019,
respectively. Net operating losses will be available to offset future taxable income, if any, through
December 2040.                                                                                                                                     
 
The utilization of Milestone Scientific's net operating losses
may
be subject to a substantial limitation due to the "change of ownership provisions" under Section
382
of the Internal Revenue Code and similar state provisions. Such limitation
may
result in the expiration of the net operating loss carry forwards before their utilization. Milestone Scientific has established a
100%
valuation allowance for all its deferred tax assets due to uncertainty as to their future realization.                                                                                                                                                           
 
As of
December 31, 2020,
and
2019,
state tax liability was approximately
$24,000
and
$18,000,
respectively. Such expense was recognized in selling, general and administrative expenses in the consolidated financial statements.     
 
Accounting for uncertainties in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a   tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure, and transition. At
December 31, 2020
and
2019,
we had
no
uncertain tax positions that required recognition in the consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Statements of Operations.
No
interest and penalties are present for periods open. Tax returns for the
2017,
2018,
and
2019
years are subject to audit by federal and state jurisdictions.  
 
A reconciliation of the statutory tax rates for the years ended
December 31,
is as follows:   
 
   
2020
    
2019
  
Statutory rate
    
21
 %    
21
 %
State income tax-all states
    
1
      
4
  
Warrant Revaluation
    
-
      
(11
 )
NOL Expiration
    
(11
 )    
(22
 )
Other
    
8
      
(3
 )
Subtotal
    
19
 %    
-11
 %
Valuation allowance
    
-19
 %    
11
 %
Effective tax rate
    
-
      
-