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INCOME TAXES (Tables) | 12 Months Ended
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Jan. 29, 2023
Income Tax Disclosure [Abstract] |
Components of earnings before provision for income taxes | The following table presents our earnings before the provision for income taxes:
in millions | Fiscal |  | Fiscal |  | Fiscal
2022 |  | 2021 |  | 2020
United States | $ | 20,990 |  |  | $ | 20,320 |  |  | $ | 16,013 |
Foreign | 1,487 |  |  | 1,417 |  |  | 965 |
Total | $ | 22,477 |  |  | $ | 21,737 |  |  | $ | 16,978 |
Components of provision for income taxes | The following table presents our provision for income taxes:
in millions | Fiscal |  | Fiscal |  | Fiscal
2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 3,918 |  |  | $ | 4,066 |  |  | $ | 3,462 |
State | 880 |  |  | 981 |  |  | 928 |
Foreign | 436 |  |  | 511 |  |  | 329 |
Total current | 5,234 |  |  | 5,558 |  |  | 4,719 |
Deferred: |  |  |  |  |
Federal | 102 |  |  | (155) |  |  | (404) |
State | 61 |  |  | (11) |  |  | (209) |
Foreign | (25) |  |  | (88) |  |  | 6 |
Total deferred | 138 |  |  | (254) |  |  | (607) |
Provision for income taxes | $ | 5,372 |  |  | $ | 5,304 |  |  | $ | 4,112 |
Reconciliation of provision for income taxes | The following table presents our combined federal, state, and foreign effective tax rates:
| Fiscal |  | Fiscal |  | Fiscal
| 2022 |  | 2021 |  | 2020
Combined federal, state, and foreign effective tax rates | 23.9 | % |  | 24.4 | % |  | 24.2 | %
The following table presents the reconciliation of our provision for income taxes at the federal statutory rate of 21% to the actual tax expense:
in millions | Fiscal |  | Fiscal |  | Fiscal
2022 |  | 2021 |  | 2020
Income taxes at federal statutory rate | $ | 4,720 |  |  | $ | 4,565 |  |  | $ | 3,565 |
State income taxes, net of federal income tax benefit | 743 |  |  | 766 |  |  | 568 |
Other, net | (91) |  |  | (27) |  |  | (21) |
Total | $ | 5,372 |  |  | $ | 5,304 |  |  | $ | 4,112 |
On August 16, 2022, the Inflation Reduction Act of 2022 (“2022 Tax Act”) was enacted into law. The key tax provisions include a 15% minimum tax on adjusted financial statement income. We do not expect any impact to the Company’s effective tax rate as a result of the new 15% minimum tax under the 2022 Tax Act.
Tax effects of temporary differences | The following table presents the tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities:
in millions | January 29, 2023 |  | January 30, 2022
Assets: |  |  |
Deferred compensation | $ | 236 |  |  | $ | 471 |
Accrued self-insurance liabilities | 276 |  |  | 272 |
State income taxes | 149 |  |  | 138 |
Merchandise inventories | 30 |  |  | — |
Non-deductible reserves | 318 |  |  | 250 |
Net operating losses | 115 |  |  | 150 |
Lease liabilities | 1,879 |  |  | 1,528 |
Deferred revenue | 148 |  |  | 121 |
Other | 56 |  |  | 67 |
Total deferred tax assets | 3,207 |  |  | 2,997 |
Valuation allowance | (5) |  |  | (10) |
Total deferred tax assets, net of valuation allowance | 3,202 |  |  | 2,987 |
Liabilities: |  |  |
Merchandise inventories | — |  |  | (14) |
Property and equipment | (992) |  |  | (902) |
Goodwill and other intangibles | (953) |  |  | (985) |
Lease right-of-use assets | (1,799) |  |  | (1,473) |
Tax on unremitted earnings | (63) |  |  | (74) |
Other | (95) |  |  | (104) |
Total deferred tax liabilities | (3,902) |  |  | (3,552) |
Net deferred tax liabilities | $ | (700) |  |  | $ | (565) |
Schedule of tax balance sheet accounts | The following table presents our noncurrent deferred tax assets and noncurrent deferred tax liabilities, netted by tax jurisdiction, as presented on the consolidated balance sheets:
in millions | Consolidated Balance Sheet Classification |  | January 29, 2023 |  | January 30, 2022
Deferred tax assets | Other assets |  | $ | 319 |  |  | $ | 344 |
Deferred tax liabilities | Deferred income taxes |  | (1,019) |  |  | (909) |
Net deferred tax liabilities |  |  | $ | (700) |  |  | $ | (565) |
Schedule of unrecognized tax benefits | The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits:
in millions | Fiscal |  | Fiscal |  | Fiscal
2022 |  | 2021 |  | 2020
Unrecognized tax benefits balance at beginning of fiscal year | $ | 570 |  |  | $ | 540 |  |  | $ | 473 |
Additions based on tax positions related to the current year | 75 |  |  | 80 |  |  | 75 |
Additions for tax positions of prior years | 22 |  |  | 24 |  |  | 72 |
Reductions for tax positions of prior years | (7) |  |  | (40) |  |  | (53) |
Reductions due to settlements | (1) |  |  | (29) |  |  | (22) |
Reductions due to lapse of statute of limitations | (16) |  |  | (5) |  |  | (5) |
Unrecognized tax benefits balance at end of fiscal year | $ | 643 |  |  | $ | 570 |  |  | $ | 540 |

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