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Note 9 - Income Taxes
 3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

NOTE 9:     INCOME TAXES


The provision for income taxes includes the following:


   

Three Months Ended March 31,

 
   

2014

   

2013

 

Current:

               

Federal

  $ -----     $ -----  

State

    -----       -----  

Total Current Provision

    -----       -----  

Deferred:

               

Federal

  $ (161,965 )   $ (388,929 )

State

    381,345       (73,451 )

Total deferred

    219,380       (462,380 )

Income tax expense/(benefit)

  $ 219,380     $ (462,380 )

In April of 2014, New York State eliminated the state income tax for qualified manufacturing companies such as CVD. Due to this change in tax law, the Company was required to write off state-level deferred tax assets which would have been used to offset future taxes payable to New York State.


Tax Rate reconciliation


The reconciliation between the Company's effective tax rate on income from continuing operations and the statutory rate is as follows:


   

Three Months Ended

March 31

 
   

2014

   

2013

 

Income tax benefit at federal statutory rate [34%]

   $ (16,581 )    $ (306,811 )

State and local income tax benefit net of federal tax benefit [0%, 6% - see above]

    -       (54,143 )

Change in capitalized inventory (Section 263A)

    (11,080 )     (5,679 )

Change in vacation accrual

    (21,608 )     (29,423 )

Changes in other accruals

    (4,674 )     (5,242 )

Difference between tax and book depreciation

    7,532       10,906  

Stock-based compensation

    (61,394 )     (24,206 )

Research & Development credits

    (54,160 )     (47,782 )
Impact of New York State taxation change     381,345       -  

Income tax expense/(benefit)

   $ 219,380      $ (462,380 )