Income Taxes (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The provision for income taxes for 2023, 2022 and 2021, consisted of the following (in millions):

	2023		2022		2021
Federal:
Current	$	9,445	$	7,890	$	8,257
Deferred	(3,644)		(2,265)		(7,176)
Total	5,801		5,625		1,081
State:
Current	1,570		1,519		1,620
Deferred	(49)		84		(338)
Total	1,521		1,603		1,282
Foreign:
Current	8,750		8,996		9,424
Deferred	669		3,076		2,740
Total	9,419		12,072		12,164
Provision for income taxes	$	16,741	$	19,300	$	14,527

Reconciliation of Provision for Income Taxes to Amount Computed by Applying the Statutory Federal Income Tax Rate to Income Before Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (21% in 2023, 2022 and 2021) to income before provision for income taxes for 2023, 2022 and 2021, is as follows (dollars in millions):

	2023			2022			2021
Computed expected tax	$	23,885		$	25,012		$	22,933
State taxes, net of federal effect	1,124			1,518			1,151
Earnings of foreign subsidiaries	(5,744)			(4,366)			(4,715)
Research and development credit, net	(1,212)			(1,153)			(1,033)
Excess tax benefits from equity awards	(1,120)			(1,871)			(2,137)
Foreign-derived intangible income deduction	—			(296)			(1,372)
Other	(192)			456			(300)
Provision for income taxes	$	16,741		$	19,300		$	14,527
Effective tax rate	14.7		%	16.2		%	13.3		%

Significant Components of Deferred Tax Assets and Liabilities

As of September 30, 2023 and September 24, 2022, the significant components of the Company’s deferred tax assets and liabilities were (in millions):

	2023		2022
Deferred tax assets:
Tax credit carryforwards	$	8,302	$	6,962
Accrued liabilities and other reserves	6,365		6,515
Capitalized research and development	6,294		1,267
Deferred revenue	4,571		5,742
Unrealized losses	2,447		2,913
Lease liabilities	2,421		2,400
Other	2,343		3,407
Total deferred tax assets	32,743		29,206
Less: Valuation allowance	(8,374)		(7,530)
Total deferred tax assets, net	24,369		21,676
Deferred tax liabilities:
Right-of-use assets	2,179		2,163
Depreciation	1,998		1,582
Minimum tax on foreign earnings	1,940		1,983
Unrealized gains	511		942
Other	490		469
Total deferred tax liabilities	7,118		7,139
Net deferred tax assets	$	17,251	$	14,537

Aggregate Changes in Gross Unrecognized Tax Benefits

The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2023, 2022 and 2021, is as follows (in millions):

	2023		2022		2021
Beginning balances	$	16,758	$	15,477	$	16,475
Increases related to tax positions taken during a prior year	2,044		2,284		816
Decreases related to tax positions taken during a prior year	(1,463)		(1,982)		(1,402)
Increases related to tax positions taken during the current year	2,628		1,936		1,607
Decreases related to settlements with taxing authorities	(19)		(28)		(1,838)
Decreases related to expiration of the statute of limitations	(494)		(929)		(181)
Ending balances	$	19,454	$	16,758	$	15,477