XML 69 R27.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
Feb. 01, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Earnings before income taxes were $5.3 billion, $5.3 billion, and $3.4 billion during 2024, 2023, and 2022, respectively, including $1.1 billion, $1.2 billion, and $1.3 billion earned by our foreign entities subject to tax outside of the U.S.

Tax Rate Reconciliation2024 2023 2022 
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of the federal tax benefit3.7 3.8 3.0 
International(1.1)(1.3)(2.1)
Excess tax benefit related to share-based payments(0.1)(0.3)(1.6)
Federal tax credits(0.8)(0.8)(1.5)
Other(0.5)(0.5)(0.1)
Effective tax rate22.2 %21.9 %18.7 %


Provision for Income Taxes
(millions)
202420232022
Current:   
Federal$1,013 $556 $(84)
State236 208 33 
International101 97 107 
Total current1,350 861 56 
Deferred:   
Federal(184)256 501 
State2 43 82 
International2 (1)(1)
Total deferred(180)298 582 
Total provision$1,170 $1,159 $638 
Net Deferred Tax Asset / (Liability)
(millions)
February 1, 2025February 3, 2024
Gross deferred tax assets:  
Accrued and deferred compensation$423 $392 
Accruals and reserves not currently deductible260 256 
Self-insured benefits207 180 
Deferred occupancy income109 118 
Lease liabilities1,600 1,468 
Other50 92 
Total gross deferred tax assets2,649 2,506 
Gross deferred tax liabilities:  
Property and equipment(2,830)(3,015)
Leased assets(1,425)(1,276)
Inventory(484)(500)
Other(203)(187)
Total gross deferred tax liabilities(4,942)(4,978)
Total net deferred tax liability (a)
$(2,293)$(2,472)
(a)$10 million and $8 million of the balances as of February 1, 2025, and February 3, 2024, respectively, is included in Other Noncurrent Assets.

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) is currently auditing certain aspects of the U.S. federal income tax returns for years 2021 through 2023 and has completed exams for years 2020 and prior. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2019.

Reconciliation of Gross Unrecognized Tax Benefits
(millions)
202420232022
Balance at beginning of period$352 $233 $125 
Additions based on tax positions related to the current year118 128 115 
Additions for tax positions of prior years22 8 21 
Reductions for tax positions of prior years(36)(13)(23)
Settlements(23)(4)(5)
Balance at end of period$433 $352 $233 

If we were to prevail on all unrecognized tax benefits recorded, the amount that would benefit the effective tax rate was $206 million, $161 million, and $107 million as of February 1, 2025, February 3, 2024, and January 28, 2023, respectively. In addition, the reversal of accrued interest and penalties would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During 2024, 2023, and 2022, we recorded an expense / (benefit) from accrued interest and penalties of $13 million, $6 million, and $(4) million, respectively. As of February 1, 2025, February 3, 2024, and January 28, 2023, total accrued interest and penalties were $21 million, $14 million, and $7 million, respectively.

It is reasonably possible that the amount of the unrecognized tax benefits with respect to our other unrecognized tax positions will increase or decrease during the next twelve months; however, an estimate of the amount or range of the change cannot be made at this time.