Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

The Federal statutory income tax rate and State income tax rate to the Group are as follows:

	For the years ended December 31,
	2025		2024
Federal statutory income tax rate	21.00	%	21.00	%
State income tax rate	8.84	%	8.84	%

The Federal statutory income tax rate to the effective income tax rate during the periods is as follows:

	For the years ended December 31,
	2025		2024
Federal statutory income tax rate	21.00	%	21.00	%
Under (over)-accrual of federal statutory tax rate	(7.82	)%	(20.36	)%
Non-deductible item	10.98	%	16.33	%
State income tax rate	8.84	%	8.84	%
Under (over)-accrual of state statutory tax rate	0.79	%	(8.81	)%
The net tax rates of temporary differences	(16.86	)%	(8.90	)%
Effective income tax rate	16.93	%	8.10	%

The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to income before taxes for the years ended December 31, 2025 and 2024, was as follows:

	For the years ended December 31,
	2025			2024
Federal statutory tax	$	265,054		$	196,973
Under (over)-accrual of federal statutory tax expense in the prior year		(98,698	)		(190,940	)
Non-taxable item adjustment		138,539			153,123
State taxes		111,575			82,916
Under (over)-accrual of state statutory tax expense in the prior year		9,983			(82,600	)
Other		(212,714	)		(83,474	)
Income tax expense	$	213,739		$	75,998

Schedule of Provision for Income Taxes

	For the years ended December 31,
	2025			2024
Current income tax expense	$	426,453		$	159,472
Deferred income tax credit		(212,714	)		(83,474	)
	$	213,739		$	75,998

The provision for income taxes for the years ended December 31, 2025 and 2024, was as follows:

	For the years ended December 31,
	2025			2024
Provision for income taxes:
Current
Federal	$	301,976		$	148,006
State		124,477			11,466
		426,453			159,472
Deferred
Federal		(194,785	)		(72,682	)
State		(17,929	)		(10,792	)
		(212,714	)		(83,474	)
Provision for income taxes:	$	213,739		$	75,998

Schedule of Deferred Tax Assets

The significant components of the Group’s deferred tax assets and liabilities on December 31, 2025 and 2024, were as follows:

	As of December 31,
	2025		2024
Deferred tax assets:
Capitalized research and development	$	381,244	$	225,286
Operating leases		353,432		745,784
Provision for expected credit loss		—		8,436
Impairment of fixed assets		—		24,455
Total deferred tax assets		734,676		1,003,961
Valuation allowance		—		—
Net deferred tax assets	$	734,676	$	1,003,961

Deferred tax liabilities:
Right-of-use assets		262,514		744,513
Total deferred tax liabilities		262,514		744,513
Deferred tax assets, net		472,162		259,448

Papa Medical Inc. S-1/A