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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our income before provision for (benefit from) income taxes for the years ended December 31, 2024, 2023 and 2022 was as follows (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Domestic | $ | 2,292 |  |  | $ | 3,196 |  |  | $ | 5,524 |
Noncontrolling interest and redeemable noncontrolling interest | 62 |  |  | (23) |  |  | 31 |
Foreign | 6,636 |  |  | 6,800 |  |  | 8,164 |
Income before income taxes | $ | 8,990 |  |  | $ | 9,973 |  |  | $ | 13,719 |
A provision for (benefit from) income taxes of $1.84 billion, $(5.00) billion and $1.13 billion has been recognized for the years ended December 31, 2024, 2023 and 2022, respectively. The components of the provision for (benefit from) income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | 48 |  |  | $ | — |
State | 45 |  |  | 57 |  |  | 62 |
Foreign | 1,315 |  |  | 1,243 |  |  | 1,266 |
Total current | 1,360 |  |  | 1,348 |  |  | 1,328 |
Deferred: |  |  |  |  |
Federal | 831 |  |  | (5,246) |  |  | 26 |
State | (49) |  |  | (653) |  |  | 1 |
Foreign | (305) |  |  | (450) |  |  | (223) |
Total deferred | 477 |  |  | (6,349) |  |  | (196) |
Total provision for (benefit from) income taxes | $ | 1,837 |  |  | $ | (5,001) |  |  | $ | 1,132 |
The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024, 2023 and 2022 was as follows (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Tax at statutory federal rate | $ | 1,887 |  |  | $ | 2,094 |  |  | $ | 2,881 |
State tax, net of federal benefit | 8 |  |  | (372) |  |  | 51 |
Excess tax benefits related to stock-based compensation | (267) |  |  | (288) |  |  | (745) |
Nontaxable manufacturing credit | (291) |  |  | (101) |  |  | — |
Foreign income rate differential | (545) |  |  | (816) |  |  | (923) |
U.S. tax credits | (317) |  |  | (593) |  |  | (276) |
GILTI and Subpart F inclusion | 882 |  |  | 670 |  |  | 1,279 |
Unrecognized tax benefits | 144 |  |  | 183 |  |  | 252 |
Change in valuation allowance | 163 |  |  | (5,962) |  |  | (1,532) |
Other | 173 |  |  | 184 |  |  | 145 |
Provision for (benefit from) income taxes | $ | 1,837 |  |  | $ | (5,001) |  |  | $ | 1,132 |
Deferred tax assets (liabilities) as of December 31, 2024 and 2023 consisted of the following (in millions):
| December 31, 2024 |  | December 31, 2023
Deferred tax assets: |  |  |
Net operating loss carry-forwards | $ | 1,295 |  |  | $ | 2,826 |
Research and development credits | 1,735 |  |  | 1,358 |
Other tax credits and attributes | 1,325 |  |  | 827 |
Deferred revenue | 1,101 |  |  | 1,035 |
Inventory and warranty reserves | 1,769 |  |  | 1,258 |
Operating lease right-of-use liabilities | 1,186 |  |  | 930 |
Capitalized research and development costs | 2,448 |  |  | 1,344 |
Deferred GILTI tax assets | 691 |  |  | 760 |
Other | 412 |  |  | 436 |
Total deferred tax assets | 11,962 |  |  | 10,774 |
Valuation allowance | (1,224) |  |  | (892) |
Deferred tax assets, net of valuation allowance | 10,738 |  |  | 9,882 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (2,658) |  |  | (2,122) |
Operating lease right-of-use assets | (1,097) |  |  | (859) |
Other | (561) |  |  | (249) |
Total deferred tax liabilities | (4,316) |  |  | (3,230) |
Deferred tax assets (liabilities), net of valuation allowance | $ | 6,422 |  |  | $ | 6,652 |
As of December 31, 2024, we maintained valuation allowances of $1.22 billion for deferred tax assets that are not more likely than not to be realized, which primarily included our California deferred tax assets, U.S. foreign tax credits and certain foreign operating losses. The valuation allowance on our net deferred tax assets increased by $332 million during the year ended December 31, 2024, and decreased by $6.46 billion and $1.73 billion during the years ended December 31, 2023 and 2022, respectively. The valuation allowance increase during the year ended December 31, 2024 was primarily due to the changes of our California deferred tax assets, U.S. foreign tax credits and certain foreign operating losses. The change in valuation allowance during the year ended December 31, 2023 was primarily due to the release of our valuation allowance with respect to our U.S. federal and certain state deferred tax assets. In the fourth quarter of 2023, based on the relevant weight of positive and negative evidence, including the amount of our taxable income in recent years which was objective and verifiable, and consideration of our expected future taxable earnings, we concluded that it is more likely than not that most of our U.S. federal and certain state deferred tax assets are realizable and released the valuation allowance on these deferred tax assets. The valuation allowance change during the years ended December 31, 2022 was primarily due to changes in our U.S. deferred tax assets and liabilities. Our deferred tax assets without a valuation allowance are more likely than not to be realized given the expectation of future earnings in the respective jurisdictions. As of December 31, 2024, we had $4.34 billion of federal and $8.59 billion of state net operating loss carry-forwards available to offset future taxable income, an immaterial amount of which, if not utilized, will begin to expire in 2026 for federal and 2025 for state purposes. Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. We have determined that no significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes or expirations. As of December 31, 2024, we had federal research and development tax credits of $1.48 billion, federal renewable energy tax credits of $1.01 billion, and state research and development tax credits of $1.06 billion. Most of our state research and development tax credits were in the state of California. If not utilized, some of the federal tax credits may expire in various amounts beginning in 2035. However, California research and development tax credits can be carried forward indefinitely. As of December 31, 2024, we intend to indefinitely reinvest our foreign earnings and cash unless such repatriation results in no or minimal tax costs. We have recorded the taxes associated with the foreign earnings we intend to repatriate in the future. For the earnings we intend to indefinitely reinvest, no deferred tax liabilities for foreign withholding or other taxes have been recorded. The estimated amount of such unrecognized withholding tax liability associated with the indefinitely reinvested earnings is approximately $309 million. Uncertain Tax Positions The changes to our gross unrecognized tax benefits were as follows (in millions):
December 31, 2021 | $ | 531 |
Increases in balances related to prior year tax positions | 136 |
Decreases in balances related to prior year tax positions | (12) |
Increases in balances related to current year tax positions | 222 |
Decreases in balances related to expiration of the statute of limitations | (7) |
December 31, 2022 | 870 |
Increases in balances related to prior year tax positions | 59 |
Decreases in balances related to settlement with tax authorities | (6) |
Increases in balances related to current year tax positions | 255 |
Decreases in balances related to expiration of the statute of limitations | (4) |
December 31, 2023 | 1,174 |
Increases in balances related to prior year tax positions | 51 |
Decreases in balances related to prior year tax positions | (27) |
Increases in balances related to current year tax positions | 227 |
Decreases in balances related to settlement with tax authorities | (4) |
Decreases in balances related to expiration of the statute of limitations | (4) |
December 31, 2024 | $ | 1,417 |
We include interest and penalties related to unrecognized tax benefits in income tax expense. We recognized net interest and penalties related to unrecognized tax benefits in provision for (benefit from) income taxes line of our consolidated statements of operations of $23 million, $17 million and $27 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, and 2023, we have accrued $69 million and $47 million, respectively, related to interest and penalties on our unrecognized tax benefits. Unrecognized tax benefits of $1.14 billion, if recognized, would affect our effective tax rate. We file income tax returns in the U.S. and various state and foreign jurisdictions. We are currently under examination by the Internal Revenue Service (“IRS”) for the years 2015 to 2018. Additional tax years within the periods 2004 to 2014 and 2019 to 2023 remain subject to examination for federal income tax purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2004 and subsequent tax years remain subject to examination in U.S. state and foreign jurisdictions. Given the uncertainty in timing and outcome of our tax examinations, an estimate of the range of the reasonably possible change in gross unrecognized tax benefits within twelve months cannot be made at this time.

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