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Income Taxes | 12 Months Ended
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Jan. 28, 2017
Income Taxes | Note L. Income Taxes For financial reporting purposes, components of income before income taxes are as follows:
|  | Fiscal Year Ended |
In thousands |  | January 28, 2017 |  |  | January 30, 2016 |  |  | January 31, 2015 |
United States |  | $ | 3,196,370 |  |  | $ | 3,102,304 |  |  | $ | 2,943,745 |
Foreign |  |  | 526,673 |  |  |  | 555,996 |  |  |  | 606,139 |
Income before provision for income taxes |  | $ | 3,723,043 |  |  | $ | 3,658,300 |  |  | $ | 3,549,884 |
The provision for income taxes includes the following:
|  | Fiscal Year Ended |
In thousands |  | January 28, 2017 |  |  | January 30, 2016 |  |  | January 31, 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,068,778 |  |  | $ | 992,094 |  |  | $ | 896,672 |
State |  |  | 213,505 |  |  |  | 208,357 |  |  |  | 180,616 |
Foreign |  |  | 148,367 |  |  |  | 149,408 |  |  |  | 155,398 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (3,107 | ) |  |  | 34,620 |  |  |  | 87,057 |
State |  |  | (10,583 | ) |  |  | (9,979 | ) |  |  | 14,231 |
Foreign |  |  | 7,849 |  |  |  | 6,142 |  |  |  | 782 |
Provision for income taxes |  | $ | 1,424,809 |  |  | $ | 1,380,642 |  |  | $ | 1,334,756 |
TJX had net deferred tax (liabilities) assets as follows:
|  | Fiscal Year Ended |
In thousands |  | January 28, 2017 |  |  | January 30, 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforward |  | $ | 27,396 |  |  | $ | 18,872 |
Reserves for lease obligations |  |  | 5,107 |  |  |  | 7,623 |
Pension, stock compensation, postretirement and employee benefits |  |  | 412,391 |  |  |  | 380,523 |
Leases |  |  | 57,223 |  |  |  | 51,823 |
Accruals and reserves |  |  | 67,662 |  |  |  | 60,498 |
Other |  |  | 48,463 |  |  |  | 31,077 |
Total gross deferred tax assets |  | $ | 618,242 |  |  | $ | 550,416 |
Valuation allowance |  |  | (29,273 | ) |  |  | (11,998 | )
Net deferred tax asset |  | $ | 588,969 |  |  | $ | 538,418 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  | $ | 569,377 |  |  | $ | 539,818 |
Capitalized inventory |  |  | 51,077 |  |  |  | 47,374 |
Tradename/intangibles |  |  | 51,976 |  |  |  | 49,111 |
Undistributed foreign earnings |  |  | 213,948 |  |  |  | 167,968 |
Other |  |  | 10,398 |  |  |  | 5,418 |
Total deferred tax liabilities |  | $ | 896,776 |  |  | $ | 809,689 |
Net deferred tax (liability) |  | $ | (307,807 | ) |  | $ | (271,271 | )
Non-current asset |  | $ | 6,193 |  |  | $ | 13,831 |
Non-current liability |  |  | (314,000 | ) |  |  | (285,102 | )
Total |  | $ | (307,807 | ) |  | $ | (271,271 | )
In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes.” This guidance requires deferred tax liabilities, deferred tax assets and valuation allowances be classified as non-current in a classified balance sheet. This ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and may be applied either prospectively or retrospectively to all periods presented. TJX has elected to early adopt the new reporting standard retrospectively on its fiscal 2016 consolidated financial statements. TJX has provided for deferred U.S. taxes on all undistributed earnings through January 28, 2017 from its subsidiaries in Canada, Puerto Rico, Italy, India and Hong Kong. For all other foreign subsidiaries, no U.S. income taxes have been provided on the approximately $785 million of undistributed earnings as of January 28, 2017 because such earnings are considered to be indefinitely reinvested in the business. A determination of the amount of unrecognized deferred tax liability related to the undistributed earnings is not practicable because of the complexities associated with the hypothetical calculations. As of January 28, 2017, TJX had available for state income tax purposes net operating loss carryforwards of $99.2 million which expire, if unused, in the years 2018 through 2036. As of January 30, 2016, TJX had available for state income tax purposes net operating loss carryforwards of $62.4 million. TJX has analyzed the realization of the state net operating loss carryforwards on an individual state basis. For those states where the Company has determined that it is more likely than not that the state net operating loss carryforwards will not be realized, a valuation allowance of $6.8 million has been provided for the deferred tax asset as of January 28, 2017 and $5.1 million as of January 30, 2016. As of January 28, 2017 and January 30, 2016, the Company had available for foreign income tax purposes (related to Australia, Austria and the Netherlands) net operating loss carryforwards of $75 million and $51.1 million, of which $4.4 million and $3.9 million will expire, if unused, in fiscal 2025 and 2026 respectively. The remaining loss carryforwards do not expire. For the deferred tax assets associated with the net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax assets will not be realized, TJX had valuation allowances recorded of approximately $22.5 million as of January 28, 2017 and approximately $6.9 million as of January 30, 2016. The difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax rate is reconciled below:
|  | Fiscal Year Ended |
|  | January 28, 2017 |  |  | January 30, 2016 |  |  | January 31, 2015 |
U.S. federal statutory income tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Effective state income tax rate |  |  | 3.5 |  |  |  | 3.5 |  |  |  | 3.6 |
Impact of foreign operations |  |  | (0.2 | ) |  |  | (0.7 | ) |  |  | (0.9 | )
All other |  |  | — |  |  |  | (0.1 | ) |  |  | (0.1 | )
Worldwide effective income tax rate |  |  | 38.3 | % |  |  | 37.7 | % |  |  | 37.6 | %
TJX’s effective income tax rate increased for fiscal 2017 as compared to fiscal 2016. The increase in the effective income tax rate was primarily due to the jurisdictional mix of income and the increase in valuation allowance on foreign net operating losses. TJX had net unrecognized tax benefits (net of federal benefit on state issues) of $38.5 million as of January 28, 2017, $34.1 million as of January 30, 2016 and $32.7 million as of January 31, 2015. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
|  | Fiscal Year Ended |
In thousands |  | January 28, 2017 |  |  | January 30, 2016 |  |  | January 31, 2015 |
Balance at beginning of year |  | $ | 43,326 |  |  | $ | 55,619 |  |  | $ | 48,680 |
Additions for uncertain tax positions taken in current year |  |  | 7,018 |  |  |  | 2,248 |  |  |  | 4,771 |
Additions for uncertain tax positions taken in prior years |  |  | 327 |  |  |  | 11,707 |  |  |  | 5,278 |
Reductions for uncertain tax positions taken in prior years |  |  | (334 | ) |  |  | (23,874 | ) |  |  | (2,747 | )
Reductions resulting from lapse of statute of limitations |  |  | (1,245 | ) |  |  | (389 | ) |  |  | — |
Settlements with tax authorities |  |  | — |  |  |  | (1,985 | ) |  |  | (363 | )
Balance at end of year |  | $ | 49,092 |  |  | $ | 43,326 |  |  | $ | 55,619 |
Included in the gross amount of unrecognized tax benefits are items that will impact future effective tax rates upon recognition. These items amounted to $43.8 million as of January 28, 2017, $39.0 million as of January 30, 2016 and $34.8 million as of January 31, 2015. TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In the U.S., fiscal years through 2010 are no longer subject to examination. In Canada, fiscal years through 2008 are no longer subject to examination. In all other jurisdictions, fiscal years through 2009 are no longer subject to examination. TJX follows the with and without approach for direct and indirect effects of windfall tax deductions. TJX’s accounting policy is to classify interest and penalties related to income tax matters as part of income tax expense. The amount of interest and penalties expensed was $1.4 million for the year ended January 28, 2017, $1.6 million for the year ended January 30, 2016 and $1.9 million for the year ended January 31, 2015. The accrued amounts for interest and penalties are $8.0 million as of January 28, 2017, $7.0 million as of January 30, 2016 and $10.1 million as of January 31, 2015. Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law, expirations of statute of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those represented on the financial statements as of January 28, 2017. During the next twelve months, it is reasonably possible that state tax audit resolutions may reduce unrecognized tax benefits by $0 to $13 million, which would reduce the provision for taxes on earnings.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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