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INCOME TAXES
 6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES
9. INCOME TAXES
Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income.
Our effective tax rates for Q2 2024 and YTD 2024 were (0.6)% and (1.4)%, respectively, compared to (163.8)% and (38.5)% in Q2 2023 and YTD 2023, respectively. The variance from the U.S. federal statutory tax rate of 21% in Q2 2024 and YTD 2024 was primarily attributable to the $308 million income tax expense impact from the impairment of goodwill, which is nondeductible for tax purposes, the $99 million and $116 million income tax expense impact of GRAIL pre-acquisition net operating losses on global intangible low-taxed income (GILTI), the utilization of U.S. foreign tax credits, and the Pillar Two global minimum top-up tax, respectively, and the $41 million and $63 million income tax expense impact of research and development expense capitalization for tax purposes, respectively. This
was partially offset by the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore.
Historically we calculated the provision/(benefit) for income taxes for interim periods utilizing an estimated annual effective tax rate applied to the income/(loss) for the reporting period, except in Q1 2024 and Q2 2023 when a year-to-date effective tax rate method was utilized. In accordance with the authoritative guidance for accounting for income taxes in interim periods, we determined the estimated annual effective tax rate method would provide a more reliable estimate of the provision for income taxes for Q2 2024 and YTD 2024 since minor changes in the estimated income/(loss) before income taxes would not result in significant changes in the estimated annual effective tax rate.
As of June 30, 2024 and December 31, 2023, prepaid income taxes, included within prepaid expenses and other current assets on the condensed consolidated balance sheets, were $24 million and $75 million, respectively.