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Income Taxes | 12 Months Ended
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Feb. 03, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Earnings before income taxes were $5.3 billion, $3.4 billion, and $8.9 billion during 2023, 2022, and 2021, respectively, including $1.2 billion, $1.3 billion, and $896 million earned by our foreign entities subject to tax outside of the U.S.
Tax Rate Reconciliation | 2023 |  | 2022 |  | 2021 |
Federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | %
State income taxes, net of the federal tax benefit | 3.8 |  | 3.0 |  | 3.9 |
International | (1.3) |  | (2.1) |  | (1.3) |
Excess tax benefit related to share-based payments | (0.3) |  | (1.6) |  | (0.8) |
Federal tax credits | (0.8) |  | (1.5) |  | (0.5) |
Other | (0.5) |  | (0.1) |  | (0.3) |
Effective tax rate | 21.9 | % | 18.7 | % | 22.0 | %
Provision for Income Taxes (millions) | 2023 | 2022 | 2021
Current: |  |  |
Federal | $ | 556 |  | $ | (84) |  | $ | 1,111 |
State | 208 |  | 33 |  | 325 |
International | 97 |  | 107 |  | 3 |
Total current | 861 |  | 56 |  | 1,439 |
Deferred: |  |  |
Federal | 256 |  | 501 |  | 423 |
State | 43 |  | 82 |  | 98 |
International | (1) |  | (1) |  | 1 |
Total deferred | 298 |  | 582 |  | 522 |
Total provision | $ | 1,159 |  | $ | 638 |  | $ | 1,961 |
Net Deferred Tax Asset / (Liability) (millions) | February 3, 2024 | January 28, 2023
Gross deferred tax assets: |  |
Accrued and deferred compensation | $ | 392 |  | $ | 365 |
Accruals and reserves not currently deductible | 256 |  | 233 |
Self-insured benefits | 180 |  | 156 |
Deferred occupancy income | 118 |  | 125 |
Lease liabilities | 1,468 |  | 1,316 |
Other | 92 |  | 142 |
Total gross deferred tax assets | 2,506 |  | 2,337 |
Gross deferred tax liabilities: |  |
Property and equipment | (3,015) |  | (2,613) |
Leased assets | (1,276) |  | (1,115) |
Inventory | (500) |  | (594) |
Other | (187) |  | (205) |
Total gross deferred tax liabilities | (4,978) |  | (4,527) |
Total net deferred tax liability (a) | $ | (2,472) |  | $ | (2,190) |
(a)$8 million and $6 million of the balances as of February 3, 2024, and January 28, 2023, respectively, is included in Other Noncurrent Assets. We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the U.S. federal income tax returns for years 2020 and prior. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before 2016.
Reconciliation of Gross Unrecognized Tax Benefits (millions) | 2023 | 2022 | 2021
Balance at beginning of period | $ | 233 |  | $ | 125 |  | $ | 181 |
Additions based on tax positions related to the current year | 128 |  | 115 |  | 32 |
Additions for tax positions of prior years | 8 |  | 21 |  | 11 |
Reductions for tax positions of prior years | (13) |  | (23) |  | (95) |
Settlements | (4) |  | (5) |  | (4) |
Balance at end of period | $ | 352 |  | $ | 233 |  | $ | 125 |
If we were to prevail on all unrecognized tax benefits recorded, the amount that would benefit the effective tax rate was $161 million, $107 million, and $67 million as of February 3, 2024, January 28, 2023, and January 29, 2022, respectively. In addition, the reversal of accrued interest and penalties would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During 2023, 2022, and 2021, we recorded an expense / (benefit) from accrued interest and penalties of $6 million, $(4) million, and $1 million, respectively. As of February 3, 2024, January 28, 2023, and January 29, 2022, total accrued interest and penalties were $14 million, $7 million, and $13 million, respectively. It is reasonably possible that the amount of the unrecognized tax benefits with respect to our other unrecognized tax positions will increase or decrease during the next twelve months; however, an estimate of the amount or range of the change cannot be made at this time.

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