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v3.23.3

Income Taxes (Tables) | 12 Months Ended
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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 |

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