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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 14 – INCOME TAXES The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2022 and 2021 are presented below: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
|  | 2022 |  |  | 2021 |
|  | For the Years Ended |
|  | December 31, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 10,614,916 |  |  | $ | 10,345,422 |
Receivable allowance |  |  | 5,057 |  |  |  | 18,885 |
Stock-based compensation |  |  | 14,825 |  |  |  | — |
Intangible assets |  |  | 313,546 |  |  |  | 662,357 |
Property and equipment |  |  | — |  |  |  | — |
Deferred rent |  |  | — |  |  |  | 12,935 |
Other carryforwards |  |  | 279 |  |  |  | — |
Deferred revenues |  |  | 204,473 |  |  |  | 177,191 |
Leases |  |  | 31,638 |  |  |  | — |
Gross deferred tax asset |  |  | 11,184,734 |  |  |  | 11,216,790 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (159,762 | ) |  |  | (447,944 | )
Gross deferred tax liabilities |  |  | (159,762 | ) |  |  | (447,944 | )
Net deferred tax assets |  |  | 11,024,972 |  |  |  | 10,768,846 |
Valuation allowance |  |  | (11,024,972 | ) |  |  | (10,768,846 | )
Net deferred tax asset, net of valuation allowance |  | $ | — |  |  | $ | — |
The income tax expense for the periods shown consist of the following: SCHEDULE OF INCOME TAX Expense
|  | 2022 |  |  | 2021 |
|  | For the Years Ended |
|  | December 31, |
|  | 2022 |  |  | 2021 |
Federal: |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | — |
Deferred |  |  | — |  |  |  | — |
State and local: |  |  |  |  |  |  |  |
Current |  |  | 24,771 |  |  |  | 6,033 |
Deferred |  |  | — |  |  |  | — |
Federal, State and local, tax expense |  |  | 24,771 |  |  |  | 6,033 |
Change in valuation allowance |  |  | — |  |  |  | — |
Income tax expense |  | $ | 24,771 |  |  | $ | 6,033 |
MUSCLE MAKER, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the periods shown, are as follows: SCHEDULE OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE
|  | 2022 |  |  | 2021 |
|  | For the Years Ended |
|  | December 31, |
|  | 2022 |  |  | 2021 |
Federal income tax benefit at statutory rate |  |  | 21.0 | % |  |  | 21.0 | %
State income tax benefit, net of federal impact |  |  | (0.5 | )% |  |  | 7.0 | %
Permanent differences |  |  | (0.1 | )% |  |  | (0.0 | )%
PPP loan forgiveness |  |  | 0.4 | % |  |  | — |
Return to provision adjustments |  |  | 3.3 | % |  |  | — |
Deferred tax asset true up- State |  |  | (14.5 | )% |  |  | — |
Deferred tax asset true up- Federal |  |  | (6.8 | )% |  |  | — |
Other |  |  | — |  |  |  | (1.7 | )%
Change in valuation allowance |  |  | (3.3 | )% |  |  | (26.3 | )%
Effective income tax rate |  |  | (0.5 | )% |  |  | 0.0 | %
The Company has filing obligations in what it considers its U.S. major tax jurisdictions as follows: Nevada, California, Connecticut, Florida, New Jersey, Texas, Virginia, New York State and New York City. The earliest year that the Company is subject to examination is the year ended December 31, 2015. The Company has approximately $63.2 million of Federal and State Net operating loss (“NOLs”) available to offset future taxable income. The net operating loss carryforwards generated prior to 2018, if not utilized, will expire from 2035 to 2037 for federal and state purposes. As of December 31, 2022 and 2021, the Company has determined that it is more likely than not that the Company will not recognize the future tax benefit of the loss carryforwards and has recognized a valuation allowance of $11,024,972 and $10,768,846, respectively. The valuation allowance increased by approximately $256,126. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Generally, in addition to certain entity reorganizations, the limitation applies when one or more “5 percent stockholders” increase their ownership, in the aggregate, by more than 50 percentage points over a 36-month time period testing period or beginning the day after the most recent ownership change, if shorter.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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