Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Oct. 01, 2023

The income tax provision for the years ended October 1, 2023 and October 2, 2022 include the following:

Schedule of Income Tax Provision

	2023			2022
	(Thousands)
	2023			2022
Current income tax expense:
Current year federal income tax	$	484		$	331
Prior year tax adjustment		(35	)		-
Current income tax expense		449			331
Deferred income tax provision:
Federal		20			33

Provision for income taxes, net	$	469		$	364

Schedule of Effective Income Tax Rate Reconciliation

The income tax provision for Optex Systems as of October 1, 2023 and October 2, 2022 differs from those computed using the statutory federal tax rate in the respective years due to the following permanent differences:

	2023			%			2022			%

Tax provision at statutory federal rate	$	574			21		$	346			21
Nondeductible expenses		3			-			1			-
Other temporary adjustments		(4	)		-			(17	)		(1	)
Prior year federal income tax adjustment		(35	)		(1	)		-			-
Change in deferred tax valuation allowance		(69	)		(3	)		34			2
Provision for income taxes, net	$	469			17		$	364			22

Schedule of Deferred Income Taxes

Deferred income taxes recorded in the balance sheets result from differences between financial statement and tax reporting of income and deductions. A summary of the composition of the deferred income tax assets (liabilities) follows:

Schedule of Deferred Income Taxes

	As of October 1, 2023			As of October 2, 2022
	(Thousands)
	Deferred Tax Asset
	As of October 1, 2023			As of October 2, 2022

Stock Compensation	$	151		$	76
Inventory Reserve		211			170
Unicap		47			34
Deferred Compensation		53			29
Property and Equipment		(212	)		(219	)
Goodwill Amortization		-			100
Intangible Asset Amortization		-			57
Contract Loss Reserve		51			61
Accrued Paid Time Off		85			85
Net Operating Losses		1,258			1,327
Other		52			65
Subtotal	$	1,696		$	1,785
Valuation allowance		(774	)		(843	)
Net deferred asset	$	922		$	942