Income Taxes (Tables)

12 Months Ended

Sep. 29, 2024

Components of Income Tax Expense (Benefit)

The components of the income tax provision from continuing operations were as follows (in millions):


	2024		2023		2022
Current provision:
Federal	$	1,306	$	1,229	$	1,114
State	3		10		1
Foreign (1)	805		491		906
	2,114		1,730		2,021
Deferred (benefit) provision:
Federal	(1,553)		(1,475)		(34)
State	(4)		(8)		15
Foreign (1)	(331)		(143)		10
	(1,888)		(1,626)		(9)
	$	226	$	104	$	2,012

(1) The foreign component of the income tax provision included foreign withholding taxes on royalty revenues included in U.S. earnings.

Income before Income Tax, Domestic and Foreign

The components of income from continuing operations before income taxes by U.S. and foreign jurisdictions were as follows (in millions):


	2024		2023		2022
United States	$	9,169	$	6,400	$	12,537
Foreign	1,167		1,043		2,461
	$	10,336	$	7,443	$	14,998

Effective Income Tax Rate Reconciliation

The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision from continuing operations (in millions, except percentages). A significant portion of our U.S. income qualifies for preferential treatment as FDII at a 13% effective tax rate.


	2024			2023			2022
Expected income tax provision at federal statutory tax rate	$	2,171		$	1,563		$	3,150
Benefit from FDII deduction, excluding the impact of capitalizing research and development expenditures	(596)			(447)			(753)
Benefit from FDII deduction related to capitalizing research and development expenditures	(585)			(598)			—
Benefit related to the transfer of intellectual property between foreign subsidiaries	(317)			—			—
Benefit related to research and development tax credits	(259)			(235)			(224)
Excess tax (benefit) deficiency associated with share-based awards	(176)			3			(257)
Foreign currency (gains) losses related to Korean withholding tax receivable	(21)			(66)			243
Benefit from fiscal 2021 and 2022 FDII deductions related to a change in sourcing of research and development expenditures	—			(126)			—
Benefit from releasing valuation allowance on unutilized foreign loss carryforwards	—			(114)			—




Nontaxable reversal of 2018 EC fine	—			—			(224)
Other	9			124			77
	$	226		$	104		$	2,012
Effective tax rate	2		%	1		%	13		%

Deferred Tax Assets and Liabilities

We had deferred tax assets and deferred tax liabilities as follows (in millions):


	September 29, 2024		September 24, 2023
Capitalized research and development expenditures	$	3,015	$	1,490
Unused tax credits	2,172		1,819
Customer incentives	769		659
Unused net operating losses	719		364
Accrued liabilities and reserves	397		401
Operating lease liabilities	282		216
Share-based compensation	152		285
Unrealized losses on other investments and marketable securities	146		159
Other	459		409
Total gross deferred tax assets	8,111		5,802
Valuation allowance	(2,061)		(1,803)
Total net deferred tax assets	6,050		3,999
Intangible assets	(388)		(335)
Operating lease assets	(248)		(194)
Unrealized gains on other investments and marketable securities	(169)		(101)
Other	(197)		(170)
Total deferred tax liabilities	(1,002)		(800)
Net deferred tax assets	$	5,048	$	3,199
Reported as:

Non-current deferred tax assets	$	5,162	$	3,310

Non-current deferred tax liabilities (1)	(114)		(111)
	$	5,048	$	3,199

(1) Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.

Unrecognized Tax Benefits Roll Forward

A summary of the changes in the amount of unrecognized tax benefits for fiscal 2024, 2023 and 2022 follows (in millions):


	2024		2023		2022
Beginning balance of unrecognized tax benefits	$	2,296	$	2,191	$	2,136
Additions based on prior year tax positions	2		10		58
Reductions for prior year tax positions and lapse in statute of limitations	(1)		(63)		(136)
Additions for current year tax positions	153		158		184
Settlements with taxing authorities	—		—		(51)
Ending balance of unrecognized tax benefits	$	2,450	$	2,296	$	2,191