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Income Taxes | 12 Months Ended
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Jan. 29, 2023
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
| January 29, 2023 |  | January 30, 2022 |  | January 31, 2021
| (In millions)
Current income taxes: |  |  |  |  |
Federal | $ | 1,703 |  |  | $ | 482 |  |  | $ | 197 |
State | 46 |  |  | 42 |  |  | 1 |
Foreign | 228 |  |  | 71 |  |  | 161 |
Total current | 1,977 |  |  | 595 |  |  | 359 |
Deferred taxes: |  |  |  |  |
Federal | (2,165) |  |  | (420) |  |  | (246) |
Foreign | 1 |  |  | 14 |  |  | (36) |
Total deferred | (2,164) |  |  | (406) |  |  | (282) |
Income tax expense (benefit) | $ | (187) |  |  | $ | 189 |  |  | $ | 77 |
Income before income tax consists of the following:
| Year Ended
| January 29, 2023 |  | January 30, 2022 |  | January 31, 2021
| (In millions)
U.S. | $ | 3,477 |  |  | $ | 8,446 |  |  | $ | 1,437 |
Foreign | 704 |  |  | 1,495 |  |  | 2,972 |
Income before income tax | $ | 4,181 |  |  | $ | 9,941 |  |  | $ | 4,409 |
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
| January 29, 2023 |  | January 30, 2022 |  | January 31, 2021
| (In millions, except percentages)
Tax expense computed at federal statutory rate | $ | 878 |  |  | 21.0 | % |  | $ | 2,088 |  |  | 21.0 | % |  | $ | 926 |  |  | 21.0 | %
Expense (benefit) resulting from: |  |  |  |  |  |  |  |  |  |  |
Acquisition termination cost | 261 |  |  | 6.2 | % |  | — |  |  | — | % |  | — |  |  | — | %
State income taxes, net of federal tax effect | 50 |  |  | 1.2 | % |  | 42 |  |  | 0.4 | % |  | 10 |  |  | 0.2 | %
Foreign-derived intangible income | (739) |  |  | (17.7) | % |  | (520) |  |  | (5.2) | % |  | — |  |  | — | %
Stock-based compensation | (309) |  |  | (7.4) | % |  | (337) |  |  | (3.4) | % |  | (136) |  |  | (3.1) | %
U.S. federal research and development tax credit | (278) |  |  | (6.6) | % |  | (289) |  |  | (2.9) | % |  | (173) |  |  | (3.9) | %
Foreign tax rate differential | (83) |  |  | (2.0) | % |  | (497) |  |  | (5.0) | % |  | (561) |  |  | (12.7) | %
IP domestication | — |  |  | — | % |  | (244) |  |  | (2.5) | % |  | — |  |  | — | %
Other | 33 |  |  | 0.8 | % |  | (54) |  |  | (0.5) | % |  | 11 |  |  | 0.2 | %
Income tax expense (benefit) | $ | (187) |  |  | (4.5) | % |  | $ | 189 |  |  | 1.9 | % |  | $ | 77 |  |  | 1.7 | %
The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:
| January 29, 2023 |  | January 30, 2022
| (In millions)
Deferred tax assets: |
Capitalized research and development expenditure (1) | $ | 1,859 |  |  | $ | 508 |
Research and other tax credit carryforwards | 951 |  |  | 798 |
GILTI deferred tax assets | 800 |  |  | 378 |
Accruals and reserves, not currently deductible for tax purposes | 686 |  |  | 258 |
Net operating loss and capital loss carryforwards | 409 |  |  | 118 |
Operating lease liabilities | 193 |  |  | 125 |
Stock-based compensation | 99 |  |  | 86 |
Property, equipment and intangible assets | 66 |  |  | 22 |
Other deferred tax assets | 91 |  |  | 22 |
Gross deferred tax assets | 5,154 |  |  | 2,315 |
Less valuation allowance | (1,484) |  |  | (907) |
Total deferred tax assets | 3,670 |  |  | 1,408 |
Deferred tax liabilities: |  |  |
Unremitted earnings of foreign subsidiaries | (228) |  |  | (150) |
Operating lease assets | (179) |  |  | (113) |
Acquired intangibles | (115) |  |  | (169) |
Gross deferred tax liabilities | (522) |  |  | (432) |
Net deferred tax asset (2) | $ | 3,148 |  |  | $ | 976 |
(1) Capitalized research and development deferred tax assets were previously included in Property, equipment and intangible assets. (2) Net deferred tax asset includes long-term deferred tax assets of $3.40 billion and $1.22 billion and long-term deferred tax liabilities of $247 million and $245 million for fiscal years 2023 and 2022, respectively. Long-term deferred tax liabilities are included in other long-term liabilities on our Consolidated Balance Sheets. As of January 29, 2023, we intend to indefinitely reinvest approximately $1.05 billion and $245 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 29, 2023 and January 30, 2022, we had a valuation allowance of $1.48 billion and $907 million, respectively, related to capital loss carryforwards, state, and certain other deferred tax assets that management determined 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 29, 2023, we had U.S. federal, state and foreign net operating loss carryforwards of $363 million, $329 million and $329 million, respectively. The federal and state carryforwards will begin to expire in fiscal years 2026 and 2024, respectively. The foreign net operating loss carryforwards of $329 million may be carried forward indefinitely. As of January 29, 2023, we had federal research tax credit carryforwards of $26 million, before the impact of uncertain tax positions, that will begin to expire in fiscal year 2024. We have state research tax credit carryforwards of $1.49 billion, before the impact of uncertain tax positions. $1.41 billion is attributable to the State of California and may be carried over indefinitely and $83 million is attributable to various other states and will begin to expire in fiscal year 2024. As of January 29, 2023, we had federal capital loss carryforwards of $1.38 billion that will begin to expire in fiscal year 2024. 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:
| January 29, 2023 |  | January 30, 2022 |  | January 31, 2021
| (In millions)
Balance at beginning of period | $ | 1,013 |  |  | $ | 776 |  |  | $ | 583 |
Increases in tax positions for current year | 268 |  |  | 246 |  |  | 158 |
Increases in tax positions for prior years | 1 |  |  | 14 |  |  | 60 |
Decreases in tax positions for prior years | (15) |  |  | (4) |  |  | (11) |
Settlements | (9) |  |  | (8) |  |  | (5) |
Lapse in statute of limitations | (20) |  |  | (11) |  |  | (9) |
Balance at end of period | $ | 1,238 |  |  | $ | 1,013 |  |  | $ | 776 |
Included in the balance of unrecognized tax benefits as of January 29, 2023 are $770 million 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 income tax expense line of our consolidated statements of income of $33 million, $14 million, and $7 million during fiscal years 2023, 2022 and 2021, respectively. As of January 29, 2023 and January 30, 2022, we have accrued $95 million and $59 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 29, 2023, 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 29, 2023, the significant tax jurisdictions that may be subject to examination include China, Germany, Hong Kong, India, Israel, Taiwan, United Kingdom, and the United States for fiscal years 2005 through 2022. As of January 29, 2023, the significant tax jurisdictions for which we are currently under examination include Germany, India, Israel, and the United States for fiscal years 2005 through 2022.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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