QUAINT OAK BANCORP INC

Income Taxes

Deferred income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely thannot that some portion of the deferred tax assets willnot be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company follows guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. A tax position is recognized as a benefit only if it is more likely thannot that the tax position would be sustained in a tax examination, with a tax examination presumed to occur. The amount recognized is the largest amount of tax benefit that has more than50 percent likelihood of being realized upon examination. For tax positionsnot meeting the more likely thannot test,no tax benefit is recorded. The Company hadno material uncertain tax positions or accrued interest and penalties as of* December 31, 2023and2022.* The Company’s policy is to account for interest as a component of interest expense and penalties as components of other expense. The Company isno longer subject to examination by taxing authorities for the years before* January 1, 2020.*