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Income Taxes | 12 Months Ended
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Feb. 01, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes In 2021, the Organization for Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently multiple sets of administrative guidance have been issued. Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact legislation in future years. Considering TJX does not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules did not have a material impact on the Company’s financial statements for fiscal 2025 and are not expected to materially increase global tax costs. There remains uncertainty as to the final Pillar Two model rules. The Company is continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions in which TJX operates. For financial reporting purposes, components of income before income taxes are as follows:
| Fiscal Year Ended
In millions | February 1, 2025 | February 3, 2024 | January 28, 2023
|  | (53 weeks) |
United States | $ | 5,541 |  | $ | 5,077 |  | $ | 4,029 |
Foreign | 942 |  | 890 |  | 607 |
Income before income taxes | $ | 6,483 |  | $ | 5,967 |  | $ | 4,636 |
The provision for income taxes includes the following:
| Fiscal Year Ended
In millions | February 1, 2025 | February 3, 2024 | January 28, 2023
|  | (53 weeks) |
Current: |  |  |
Federal | $ | 1,009 |  | $ | 982 |  | $ | 656 |
State | 338 |  | 344 |  | 233 |
Foreign | 244 |  | 175 |  | 185 |
Deferred: |  |  |
Federal | 9 |  | 6 |  | 52 |
State | 14 |  | (34) |  | 0 |
Foreign | 5 |  | 20 |  | 12 |
Provision for income taxes | $ | 1,619 |  | $ | 1,493 |  | $ | 1,138 |
TJX had net deferred tax (liabilities) assets as follows:
| Fiscal Year Ended
In millions | February 1, 2025 | February 3, 2024
Deferred tax assets: |  |
Net operating loss carryforward | $ | 104 |  | $ | 137 |
Pension, stock compensation, postretirement and employee benefits | 392 |  | 388 |
Operating lease liabilities | 2,634 |  | 2,589 |
Accruals and reserves | 300 |  | 274 |
Other | 20 |  | 17 |
Total gross deferred tax assets | $ | 3,450 |  | $ | 3,405 |
Valuation allowance | (51) |  | (63) |
Total deferred tax asset | $ | 3,399 |  | $ | 3,342 |
Deferred tax liabilities: |  |
Property, plant and equipment | $ | 742 |  | $ | 701 |
Capitalized inventory | 73 |  | 68 |
Operating lease right of use assets | 2,540 |  | 2,492 |
Tradename/intangibles | 24 |  | 23 |
Undistributed foreign earnings | 23 |  | 29 |
Other | 5 |  | 5 |
Total deferred tax liabilities | $ | 3,407 |  | $ | 3,318 |
Net deferred tax (liability) asset | $ | (8) |  | $ | 24 |
Non-current asset | $ | 148 |  | $ | 172 |
Non-current liability | (156) |  | (148) |
Total | $ | (8) |  | $ | 24 |
TJX has provided for all applicable state and foreign withholding taxes on all undistributed earnings of its foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Vietnam through February 1, 2025. The Company has not provided for federal, state, or foreign withholding taxes on the approximately $1.6 billion of undistributed earnings related to all other foreign subsidiaries as such earnings are considered to be indefinitely reinvested in the business. The net amount of unrecognized state and foreign withholding tax liabilities related to the undistributed earnings is not material. As of February 1, 2025 and February 3, 2024, for state income tax purposes, TJX had net operating loss carryforwards of $225 million and $318 million respectively. Of that amount, $13 million can be carried forward indefinitely and $212 million will expire, if unused, in the years 2031 through 2045. 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 $1 million has been provided for the deferred tax asset as of February 1, 2025 and $1 million as of February 3, 2024. The Company had available for foreign income tax purposes (related to Australia, Austria, Germany, the Netherlands and the U.K.) net operating loss carryforwards of $338 million as of February 1, 2025 and $439 million as of February 3, 2024. The full amount of the loss carryforwards does 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 $50 million as of February 1, 2025 and $62 million as of February 3, 2024. 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
| February 1, 2025 | February 3, 2024 | January 28, 2023
|  | (53 weeks) |
U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
Effective state income tax rate | 4.5 |  | 4.2 |  | 4.3 |
Impact of foreign operations | 1.0 |  | 0.9 |  | 1.1 |
Excess share-based compensation | (1.3) |  | (0.8) |  | (1.0) |
Tax credits | (0.2) |  | (0.2) |  | (0.3) |
Nondeductible/nontaxable items | 0.1 |  | 0.1 |  | (0.1) |
All other | (0.1) |  | (0.2) |  | (0.5) |
Worldwide effective income tax rate | 25.0 | % | 25.0 | % | 24.5 | %
There were no significant changes to TJX’s effective income tax rate for fiscal 2025, compared to fiscal 2024. TJX had net unrecognized tax benefits of $217 million as of February 1, 2025, $228 million as of February 3, 2024 and $265 million as of January 28, 2023. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
| Fiscal Year Ended
In millions | February 1, 2025 | February 3, 2024 | January 28, 2023
Balance, beginning of year | $ | 226 |  | $ | 266 |  | $ | 280 |
Additions for uncertain tax positions taken in current year | 4 |  | 6 |  | 8 |
Additions for uncertain tax positions taken in prior years | 61 |  | — |  | 7 |
Reductions for uncertain tax positions taken in prior years | (20) |  | — |  | (2) |
Reductions resulting from lapse of statute of limitations | (2) |  | (19) |  | (18) |
Settlements with tax authorities | (8) |  | (27) |  | (9) |
Balance, end of year | $ | 261 |  | $ | 226 |  | $ | 266 |
Included in the gross amount of unrecognized tax benefits are items that will impact future effective tax rates upon recognition. These items amounted to $212 million as of February 1, 2025, $221 million as of February 3, 2024 and $251 million as of January 28, 2023. 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. and India, fiscal years through 2010 are no longer subject to examination. In all other jurisdictions, fiscal years through 2011 are no longer subject to examination. 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 $7 million for the fiscal years ended February 1, 2025, $10 million for the fiscal years ended February 3, 2024 and $7 million for the fiscal years ended January 28, 2023. The accrued amounts for interest and penalties are $28 million as of February 1, 2025, $32 million as of February 3, 2024 and $37 million as of January 28, 2023. Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law, expirations of statutes 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 Consolidated Financial Statements as of February 1, 2025. During the next twelve months, it is reasonably possible that tax audit resolutions may reduce unrecognized tax benefits by up to $29 million, which would reduce the provision for taxes on earnings.

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