Income Taxes

6 Months Ended

Dec. 29, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded an income tax benefit of $18,141 and $2,151 on a loss before income taxes of $63,722 and $13,071 for the second quarters ended December 29, 2023 and December 30, 2022, respectively. The Company recorded an income tax benefit of $31,168 and $3,173 on a loss before income taxes of $113,457 and $28,428 for the six months ended December 29, 2023 and December 30, 2022, respectively.

During the second quarter and six months ended December 29, 2023, the Company recognized a tax provision of $431 and $1,646 related to stock compensation shortfalls, respectively, and during the second quarter and six months ended December 30, 2022 the Company recognized a tax provision of $134 and $1,745 related to stock compensation shortfalls, respectively. During the second quarter ended December 30, 2022, the Company recognized a tax benefit of $2,348 related to a release of income tax reserves for unrecognized income tax benefits due to the expiration of the statute of limitations.

The effective tax rate for the second quarters and six months ended December 29, 2023 and December 30, 2022 differed from the federal statutory rate primarily due to federal and state research and development credits, non-deductible compensation, stock compensation shortfalls and state taxes. The effective tax rate for the second quarter and six months ended December 30, 2022 also differed from the federal statutory rate due to the release of income tax reserves for previously unrecognized income tax benefits.

The Tax Cuts and Jobs Act of 2017 requires companies to capitalize and amortize domestic research and development expenditures over five years for tax purposes, and foreign research and development expenditures over fifteen years for tax purposes, effective for the Company beginning in the fiscal year ended June 30, 2023. As a result, the Company has recorded a deferred tax asset through the second quarter ended December 29, 2023 of $88,949. During the six months ended December 29, 2023, the Company has made $15,314 of tax payments related to this requirement. The Company will continue to monitor guidance and any proposed regulations and adjust the estimates as necessary.