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Income Taxes | 12 Months Ended
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Dec. 26, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of Income Before Income Taxes The components of income before income taxes were as follows (in thousands):
| Fiscal Year Ended
| December 26, 2020 |  | December 28, 2019 |  | December 29, 2018
United States | $ | 72,950 |  |  | $ | 41,115 |  |  | $ | 20,877 |
Foreign | 12,225 |  |  | 9,948 |  |  | 13,050 |
| $ | 85,175 |  |  | $ | 51,063 |  |  | $ | 33,927 |
Provision for Income Taxes The components of the provision (benefit) for income taxes are as follows (in thousands):
| Fiscal Year Ended
| December 26, 2020 |  | December 28, 2019 |  | December 29, 2018
Current provision: |  |  |  |  |
Federal | $ | 1,799 |  |  | $ | 179 |  |  | $ | 79 |
State | 1,194 |  |  | 2,302 |  |  | 388 |
Foreign | 4,278 |  |  | 4,202 |  |  | 4,687 |
| 7,271 |  |  | 6,683 |  |  | 5,154 |
Deferred provision (benefit): |  |  |  |  |
Federal | 1,472 |  |  | 8,128 |  |  | (72,295) |
State | (267) |  |  | (1,898) |  |  | (2,056) |
Foreign | (1,824) |  |  | (1,196) |  |  | (912) |
| (619) |  |  | 5,034 |  |  | (75,263) |
Total provision (benefit) for income taxes | $ | 6,652 |  |  | $ | 11,717 |  |  | $ | (70,109) |
Tax Rate Reconciliation The following is a reconciliation of the difference between income taxes computed by applying the federal statutory rate of 21% and the provision (benefit) from income taxes (in thousands):
| Fiscal Year Ended
| December 26, 2020 |  | December 28, 2019 |  | December 29, 2018
U.S. statutory federal tax rate | $ | 17,887 |  |  | $ | 10,723 |  |  | $ | 7,125 |
State taxes, net of federal benefit | 663 |  |  | 441 |  |  | 778 |
Stock-based compensation | (4,962) |  |  | (911) |  |  | (453) |
Research and development credits | (6,576) |  |  | (6,436) |  |  | (3,213) |
Foreign taxes at rates different than the U.S. | 415 |  |  | 1,454 |  |  | 1,287 |
Other permanent differences | 400 |  |  | (148) |  |  | 152 |
Global intangible low-taxed income | — |  |  | 1,369 |  |  | 1,828 |
Foreign Derived Intangible Income | (3,668) |  |  | — |  |  | — |
Change in valuation allowance | 1,862 |  |  | 2,567 |  |  | (75,803) |
Other | 631 |  |  | 2,658 |  |  | (1,810) |
Total | $ | 6,652 |  |  | $ | 11,717 |  |  | $ | (70,109) |
Deferred Tax Assets and Liabilities Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to be reversed. Significant deferred tax assets and liabilities consisted of the following (in thousands):
| As of
| December 26, 2020 |  | December 28, 2019
Tax credits | $ | 42,927 |  |  | $ | 44,696 |
Inventory reserve | 13,401 |  |  | 12,350 |
Other reserves and accruals | 9,470 |  |  | 5,852 |
Non-statutory stock options | 2,794 |  |  | 2,982 |
Depreciation and amortization | 20,961 |  |  | 27,758 |
Net operating loss carryforwards | 18,421 |  |  | 21,410 |
Gross deferred tax assets | 107,974 |  |  | 115,048 |
Valuation allowance | (38,466) |  |  | (36,604) |
Total deferred tax assets | 69,508 |  |  | 78,444 |
Acquired intangibles and fixed assets | (8,395) |  |  | (13,997) |
Unrealized investment gains | (106) |  |  | (106) |
Tax on undistributed earnings | (110) |  |  | (75) |
Total deferred tax liabilities | (8,611) |  |  | (14,178) |
Net deferred tax assets | $ | 60,897 |  |  | $ | 64,266 |
We are required to evaluate the realizability of our deferred tax assets in both our U.S. and non-U.S. jurisdictions on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. From the fourth quarter of fiscal 2009 to the third quarter of fiscal 2018, we maintained a 100% valuation allowance against most of our U.S. deferred tax assets because there was insufficient positive evidence to overcome the existing negative evidence such that it was not more likely than not that the U.S. deferred tax assets were realizable. While we reported U.S. pre-tax income in fiscal 2015 and fiscal 2017, because we reported U.S. pre-tax losses during the previous seven fiscal years, we continued to maintain the 100% valuation allowance through the third quarter of fiscal 2018. The valuation allowance decreased by $75.8 million in fiscal 2018 as we released the valuation allowance against a significant portion of the U.S. federal deferred tax assets and a portion of the U.S. state deferred tax assets. We determined that the positive evidence overcame any negative evidence and concluded that it was more likely than not that the U.S. deferred tax assets were realizable after considering the reported positive operating performance in the U.S. for two consecutive fiscal years, the reported cumulative three-year U.S. pre-tax profit, and the expected positive operating performance in the U.S. for 2019. As of December 26, 2020, we maintained a valuation allowance of $38.5 million, primarily related to California deferred tax assets arising from research credits and foreign tax credit carryovers, due to uncertainty about the future realization of these assets. Tax Credits and Carryforwards Tax credits and carryforwards available to us at December 26, 2020 consisted of the following (in thousands):
|  | Amount |  | Latest Expiration Date
Federal research and development tax credit |  | $ | 36,579 |  |  | 2023-2040
Foreign tax credit carryforwards |  | 1,059 |  |  | 2021-2027
California research credits |  | 42,615 |  |  | Indefinite
State net operating loss carryforwards |  | 247,990 |  |  | 2022-Indefinite
Singapore net operating loss carryforwards |  | 7,046 |  |  | Indefinite
Undistributed Earnings As of December 26, 2020, unremitted earnings of foreign subsidiaries was estimated at $34.4 million. We intend to permanently invest $12.0 million of undistributed earnings indefinitely outside of the U.S. To the extent we repatriate the remaining $22.4 million of undistributed foreign earnings to the U.S., we established a deferred tax liability of $0.1 million for foreign withholding taxes. Our estimates are provisional and subject to further analysis. Unrecognized Tax Benefits We recognize the benefits of tax return positions if we determine that the positions are “more-likely-than-not” to be sustained by the taxing authority. Interest and penalties accrued on unrecognized tax benefits are recorded as tax expense in the period incurred. The following table reflects changes in the unrecognized tax benefits (in thousands):
| Fiscal Year Ended
| December 26, 2020 |  | December 28, 2019 |  | December 29, 2018
Unrecognized tax benefit, beginning balance | $ | 28,800 |  |  | $ | 25,224 |  |  | $ | 18,296 |
Additions based on tax positions related to the current year | 3,072 |  |  | 3,679 |  |  | 1,677 |
Additions based on tax positions from prior years | 702 |  |  | — |  |  | 5,332 |
Reductions for tax positions of prior years | — |  |  | (5) |  |  | (7) |
Reductions due to lapse of the applicable statute of limitations | (77) |  |  | (98) |  |  | (74) |
Unrecognized tax benefit, ending balance | $ | 32,497 |  |  | $ | 28,800 |  |  | $ | 25,224 |
Interest and penalties recognized as a component of Provision (benefit) for income taxes | $ | 50 |  |  | $ | 59 |  |  | $ | 71 |
Interest and penalties accrued at period end | 204 |  |  | 212 |  |  | 230 |
Of the unrecognized tax benefits at December 26, 2020, $15.8 million would impact the effective tax rate if recognized. The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities which might result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is judgmental in nature. However, we believe we have adequately provided for any reasonably foreseeable outcome related to those matters. Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. As of December 26, 2020, changes to our uncertain tax positions in the next 12 months that are reasonably possible are not expected to have a significant impact on our financial position or results of operations. At December 26, 2020, our tax years 2017 through 2020, 2016 through 2020 and 2015 through 2020, remain open for examination in the federal, state and foreign jurisdictions, respectively. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and credits were generated and carried forward, and make adjustments up to the net operating loss and credit carryforward amounts.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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