Our income tax expense, deferred tax assets and liabilities, and unrecognized tax benefits reflect management's best assessment of estimated current and future liabilities. We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

The following two tables present the components of our income before provision for income taxes by geographic region and the portion of our provision for income taxes classified as current and deferred (in thousands):


	Fiscal Year Ended
	September 24, 2021		September 25, 2020		September 27, 2019
United States	$	104,741	$	32,426	$	60,500
Foreign	249,771		207,289		221,807
Total income before income taxes	$	354,512	$	239,715	$	282,307


	Fiscal Year Ended
	September 24, 2021		September 25, 2020		September 27, 2019
Current:
Federal	$	7,216	$	(48,517)	$	14,144
State	953		735		394
Foreign	65,568		61,153		64,335
Total current	73,737		13,371		78,873

Deferred:
Federal	(36,035)		(4,674)		(55,793)
State	(63)		(111)		1,007
Foreign	(950)		(490)		2,715
Total deferred	(37,048)		(5,275)		(52,071)
Provision for income taxes	$	36,689	$	8,096	$	26,802

As a result of the Tax Act, foreign accumulated earnings that were subject to the mandatory Transition Tax as of December 31, 2017, can be repatriated to the U.S. without incurring further U.S. federal tax. The Tax Act changed to a modified territorial tax system through the provision of a 100% dividend received deduction for the foreign-source portions of dividends received from controlled foreign subsidiaries. As a result, we have reevaluated our historical assertion and determined that we no longer consider a vast majority of these earnings to be indefinitely reinvested. During fiscal 2021, we repatriated $200 million of foreign subsidiary earnings which were exempt from foreign withholding tax. As of September 24, 2021, the total undistributed earnings of our foreign subsidiaries were approximately $239 million. The unrecognized deferred tax liability on the portion of the undistributed earnings considered indefinitely reinvested is not material.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, using enacted tax rates in effect for the year in which the differences are expected to reverse. A summary of the tax effects of the temporary differences were as follows (in thousands):


	Fiscal Year Ended
	September 24, 2021		September 25, 2020
Deferred income tax assets:
Investments	$	1,439	$	1,899

Inventories	6,551		6,863
Net operating loss	3,305		3,450

Accrued expenses	17,686		13,839
Stock-based compensation	16,926		17,397
Revenue recognition	4,245		4,374

Depreciation and amortization	81,963		45,572
Lease liability	15,377		17,655
Research and development credits	31,635		31,795
Foreign tax credits	12,793		12,161
Deemed repatriated earnings tax benefit	9,788		9,788
Other	4,801		4,765
Total gross deferred income tax assets	206,509		169,558
Less: valuation allowance	(33,284)		(30,416)
Total deferred income tax assets	173,225		139,142

Deferred income tax liabilities:

Right of use asset	(14,288)		(17,360)
Intangible assets	(2,917)		(2,901)

Deferred income tax assets, net	$	156,020	$	118,881

As of September 24, 2021, the NOL carryforwards for U.S. federal and California were $3.6 million and $7.2 million, respectively, and will start to expire in fiscal 2034 and 2029, respectively. Additionally, we had foreign NOL carryforwards of $9.8 million as of September 24, 2021, an amount which is not subject to expiration. As of September 24, 2021, we had foreign tax credit and federal R&D tax credit carryforwards of $7.9 million and $13.0 million, respectively, which will start to expire in fiscal 2029 and fiscal 2035, respectively. We had California R&D tax credits of $34.3 million, which will carry forward indefinitely, and foreign R&D tax credits of $3.0 million, which will start to expire in fiscal 2028.

As of September 24, 2021, a $25.7 million valuation allowance was recorded against California deferred tax assets, a $2.0 million valuation allowance was recorded against federal foreign tax credit deferred tax assets, and a $5.6 million valuation allowance was recorded against foreign deferred tax assets for which ultimate realization of its future benefits is uncertain.

Each period, the combination of multiple different factors can impact our effective tax rate. These factors include both recurring items such as tax rates and the relative amount of income earned in foreign jurisdictions, as well as discrete items that may occur in, but are not necessarily consistent between periods. A reconciliation of the federal statutory tax rate to our effective tax rate on income from continuing operations was as follows:


	Fiscal Year Ended
	September 24, 2021		September 25, 2020		September 27, 2019
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal effect	0.2		0.2		0.2
Stock-based compensation	(5.6)		(2.7)		(1.9)
Research and development tax credits	(2.6)		(3.0)		(4.7)
Foreign-derived intangible income deduction	(2.2)		(2.2)		(0.7)
U.S. tax on foreign entities	0.8		3.1		0.6
Foreign rate differential	(3.4)		(1.8)		(4.4)
Increase (decrease) unrecognized tax benefit	2.0		(12.9)		3.4
Tax Act	—		—		(7.6)
Change in Valuation Allowance	—		—		1.5
Other	0.1		1.7		2.1
Effective tax rate	10.3	%	3.4	%	9.5	%

Our effective tax rate was 10.3% in fiscal 2021, compared with our federal statutory rate of 21.0%, and with our effective tax rate in fiscal 2020 of 3.4%. The increase in our effective tax rate is primarily related to a benefit in fiscal 2020 from reversals of unrecognized tax benefits that did not recur in fiscal 2021 partially offset by higher benefits in fiscal 2021 related to changes in jurisdictional mix of income and settlement of stock-based awards.

Our effective tax rate in fiscal 2020 decreased as compared to the effective tax rate in fiscal 2019 of 9.5% due to reversals of unrecognized tax benefits in fiscal 2020. The effective tax rate in fiscal 2019 also included a benefit from updated calculations related to the Tax Act.

As of September 24, 2021, the total amount of gross unrecognized tax benefits was $66.1 million, of which $43.6 million, if recognized, would reduce our effective tax rate. Our liability increased from fiscal 2020 primarily due to additional accruals in fiscal 2021. Our liability for unrecognized tax benefits is classified within other non-current liabilities in our consolidated balance sheets. Over the next twelve months, we estimate that there will be no reduction to this amount. Aggregate changes in the balance of gross unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands):


	Fiscal Year Ended
	September 24, 2021		September 25, 2020		September 27, 2019
Beginning Balance	$	60,691	$	108,539	$	102,009
Gross increases - tax positions taken during prior years	220		5,504		115
Gross decreases - tax positions taken during prior years	(247)		—		—
Gross increases - tax positions taken during current year	6,979		7,509		6,822
Gross decreases - settlements with tax authorities during current year	(875)		(37)		—
Lapse of statute of limitations	(662)		(60,824)		(407)
Ending Balance	$	66,106	$	60,691	$	108,539

We include interest and penalties related to gross unrecognized tax benefits within our provision for income taxes. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued are reduced in the period that such determination is made and are reflected as a reduction of the overall income tax provision. In fiscal year 2021, our current tax provision was increased by interest expense of $1.0 million, while in fiscal year 2020, our current tax provision was decreased by interest expense of $6.3 million. Accrued interest and penalties are included within the related tax liability line item in our consolidated balance sheets. Our accrued interest and penalties on unrecognized tax benefits as of September 24, 2021 and September 25, 2020 were as follows (in thousands):


	Fiscal Year Ended
	September 24, 2021		September 25, 2020
Accrued interest	$	5,030	$	4,017
Accrued penalties	47		45
Total	$	5,077	$	4,062

We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected tolling of the statute of limitations in various taxing jurisdictions. We file income tax returns in the U.S. federal, states, and foreign jurisdictions. The material income tax jurisdictions are the U.S. federal, California, New York, and the Netherlands.

We are currently under audit by the state of Oregon for fiscal years 2016 through 2018, state of New York for fiscal years 2017 through 2019, and Spain for fiscal years 2014 through 2016. In addition, our fiscal 2014 amended U.S. federal tax return is currently under review. Aside from the years still under audit noted above, the statute remains open for fiscal years 2017 and onward for U.S. federal, state, and foreign purposes. Therefore, these periods may be subject to examination by the tax authorities.

Management does not believe that the outcome of any ongoing examination will have a material impact on our consolidated financial statements. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If resolution of any tax issues addressed in our current audits are inconsistent with management’s expectations, we may be required to adjust our tax provision for income taxes in the period such resolution occurs.