v3.24.0.1
Income Taxes
 12 Months Ended
Jan. 28, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax expense (benefit) applicable to income before income taxes consists of the following:
 Year Ended
 Jan 28, 2024Jan 29, 2023Jan 30, 2022
 (In millions)
Current income taxes:   
Federal$5,710 $1,703 $482 
State335 46 42 
Foreign502 228 71 
Total current6,547 1,977 595 
Deferred income taxes:   
Federal(2,499)(2,165)(420)
State(206)— — 
Foreign216 1 14 
Total deferred(2,489)(2,164)(406)
Income tax expense (benefit)$4,058 $(187)$189 
Income before income tax consists of the following:
 Year Ended
 Jan 28, 2024Jan 29, 2023Jan 30, 2022
 (In millions)
U.S.$29,495 $3,477 $8,446 
Foreign4,323 704 1,495 
Income before income tax$33,818 $4,181 $9,941 
The income tax expense (benefit) differs from the amount computed by applying the U.S. federal statutory rate of 21% to income before income taxes as follows:
 Year Ended
 Jan 28, 2024Jan 29, 2023Jan 30, 2022
 (In millions, except percentages)
Tax expense computed at federal statutory rate$7,102 21.0 %$878 21.0 %$2,088 21.0 %
Expense (benefit) resulting from:
State income taxes, net of federal tax effect120 0.4 %50 1.2 %42 0.4 %
Foreign-derived intangible income(1,408)(4.2)%(739)(17.7)%(520)(5.2)%
Stock-based compensation(741)(2.2)%(309)(7.4)%(337)(3.4)%
Foreign tax rate differential(467)(1.4)%(83)(2.0)%(497)(5.0)%
U.S. federal research and development tax credit(431)(1.3)%(278)(6.6)%(289)(2.9)%
Acquisition termination cost— — %261 6.2 %— — %
IP domestication— — %— — %(244)(2.5)%
Other(117)(0.3)%33 0.8 %(54)(0.5)%
Income tax expense (benefit)$4,058 12.0 %$(187)(4.5)%$189 1.9 %
The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:
 Jan 28, 2024Jan 29, 2023
 (In millions)
Deferred tax assets: 
Capitalized research and development expenditure$3,376 $1,859 
GILTI deferred tax assets1,576 800 
Accruals and reserves, not currently deductible for tax purposes1,121 686 
Research and other tax credit carryforwards936 951 
Net operating loss and capital loss carryforwards439 409 
Operating lease liabilities263 193 
Stock-based compensation106 99 
Property, equipment and intangible assets4 66 
Other deferred tax assets179 91 
Gross deferred tax assets8,000 5,154 
Less valuation allowance(1,552)(1,484)
Total deferred tax assets6,448 3,670 
Deferred tax liabilities:  
Unremitted earnings of foreign subsidiaries(502)(228)
Operating lease assets(255)(179)
Acquired intangibles(74)(115)
Gross deferred tax liabilities(831)(522)
Net deferred tax asset (1)$5,617 $3,148 
(1) Net deferred tax asset includes long-term deferred tax assets of $6.1 billion and $3.4 billion and long-term deferred tax liabilities of $462 million and $247 million for fiscal years 2024 and 2023, respectively. Long-term deferred tax liabilities are included in other long-term liabilities on our Consolidated Balance Sheets.
As of January 28, 2024, we intend to indefinitely reinvest approximately $1.1 billion and $250 million of cumulative undistributed earnings held by certain subsidiaries in Israel and the United Kingdom, respectively. We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to these investments as the determination of such amount is not practicable.
As of January 28, 2024 and January 29, 2023, we had a valuation allowance of $1.6 billion and $1.5 billion, respectively, related to capital loss carryforwards, and certain state and other deferred tax assets that management determined are not likely to be realized due, in part, to jurisdictional projections of future taxable income, including capital gains. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax assets as income tax benefits during the period.
As of January 28, 2024, we had U.S. federal, state and foreign net operating loss carryforwards of $315 million, $342 million and $361 million, respectively. The federal and state carryforwards will begin to expire in fiscal years 2026 and 2025, respectively. The foreign net operating loss carryforwards of $361 million may be carried forward indefinitely. As of January 28, 2024, we had federal research tax credit carryforwards of $31 million, before the impact of uncertain tax positions, that will begin to expire in fiscal year 2025. We have state research tax credit carryforwards of $1.6 billion, before the impact of uncertain tax positions. $1.5 billion is attributable to the State of California and may be carried over indefinitely and $75 million is attributable to various other states and will begin to expire in fiscal year 2025. As of January 28, 2024, we had federal capital loss carryforwards of $1.4 billion that will begin to expire in fiscal year 2025.
Our tax attributes remain subject to audit and may be adjusted for changes or modification in tax laws, other authoritative interpretations thereof, or other facts and circumstances. Utilization of tax attributes may also be subject to limitations due to ownership changes and other limitations provided by the Internal Revenue Code and similar state and foreign tax provisions. If any such limitations apply, the tax attributes may expire or be denied before utilization.
A reconciliation of gross unrecognized tax benefits is as follows:
 Jan 28, 2024Jan 29, 2023Jan 30, 2022
 (In millions)
Balance at beginning of period$1,238 $1,013 $776 
Increases in tax positions for current year616 268 246 
Increases in tax positions for prior years87 1 14 
Decreases in tax positions for prior years(148)(15)(4)
Settlements(104)(9)(8)
Lapse in statute of limitations(19)(20)(11)
Balance at end of period$1,670 $1,238 $1,013 
Included in the balance of unrecognized tax benefits as of January 28, 2024 are $1.0 billion of tax benefits that would affect our effective tax rate if recognized.
We classify an unrecognized tax benefit as a current liability, or amount refundable, to the extent that we anticipate payment or receipt of cash for income taxes within one year. The amount is classified as a long-term liability, or reduction of long-term amount refundable, if we anticipate payment or receipt of cash for income taxes during a period beyond a year.
We include interest and penalties related to unrecognized tax benefits as a component of income tax expense. We recognized net interest and penalties related to unrecognized tax benefits in the income tax expense line of our consolidated statements of income of $42 million, $33 million, and $14 million during fiscal years 2024, 2023 and 2022, respectively. As of January 28, 2024 and January 29, 2023, we have accrued $140 million and $95 million, respectively, for the payment of interest and penalties related to unrecognized tax benefits, which is not included as a component of our gross unrecognized tax benefits.
While we believe that we have adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax-related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved. As of January 28, 2024, we have not identified any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.
We are subject to taxation by taxing authorities both in the United States and other countries. As of January 28, 2024, the significant tax jurisdictions that may be subject to examination include the United States for fiscal years after 2020, as well as China, Germany, Hong Kong, India, Israel, Taiwan, and the United Kingdom for fiscal years 2005 through 2023. As of January 28, 2024, the significant tax jurisdictions for which we are currently under examination include Germany, India, Israel, and Taiwan for fiscal years 2005 through 2023.