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Income Taxes | 12 Months Ended
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Dec. 25, 2021
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 25, 2021 |  | December 26, 2020 |  | December 28, 2019
United States | $ | 74,298 |  |  | $ | 72,950 |  |  | $ | 41,115 |
Foreign | 24,202 |  |  | 12,225 |  |  | 9,948 |
| $ | 98,500 |  |  | $ | 85,175 |  |  | $ | 51,063 |
Provision for Income Taxes The components of the provision for income taxes are as follows (in thousands):
| Fiscal Year Ended
| December 25, 2021 |  | December 26, 2020 |  | December 28, 2019
Current provision: |  |  |  |  |
Federal | $ | 2,334 |  |  | $ | 1,799 |  |  | $ | 179 |
State | 712 |  |  | 1,194 |  |  | 2,302 |
Foreign | 7,661 |  |  | 4,278 |  |  | 4,202 |
| 10,707 |  |  | 7,271 |  |  | 6,683 |
Deferred provision (benefit): |  |  |  |  |
Federal | 4,651 |  |  | 1,472 |  |  | 8,128 |
State | 522 |  |  | (267) |  |  | (1,898) |
Foreign | (1,304) |  |  | (1,824) |  |  | (1,196) |
| 3,869 |  |  | (619) |  |  | 5,034 |
Total provision for income taxes | $ | 14,576 |  |  | $ | 6,652 |  |  | $ | 11,717 |
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 from income taxes (in thousands):
| Fiscal Year Ended
| December 25, 2021 |  | December 26, 2020 |  | December 28, 2019
U.S. statutory federal tax rate | $ | 20,685 |  |  | $ | 17,887 |  |  | $ | 10,723 |
State taxes and credits, net of federal benefit | 811 |  |  | 663 |  |  | 441 |
Stock-based compensation | (6,118) |  |  | (4,962) |  |  | (911) |
Research and development credits | (7,153) |  |  | (6,576) |  |  | (6,436) |
Foreign taxes at rates different than the U.S. | 2,286 |  |  | 415 |  |  | 1,454 |
Other permanent differences | 2,043 |  |  | 400 |  |  | (148) |
Global intangible low-taxed income | — |  |  | — |  |  | 1,369 |
Foreign derived intangible income | (2,486) |  |  | (3,668) |  |  | — |
Change in valuation allowance | 2,231 |  |  | 1,862 |  |  | 2,567 |
Other | 2,277 |  |  | 631 |  |  | 2,658 |
Total | $ | 14,576 |  |  | $ | 6,652 |  |  | $ | 11,717 |
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 25, 2021 |  | December 26, 2020 |
Tax credits | $ | 41,650 |  |  | $ | 42,927 |  |
Inventory reserve | 13,691 |  |  | 13,401 |  |
Other reserves and accruals | 8,523 |  |  | 8,610 |  |
Non-statutory stock options | 2,837 |  |  | 2,794 |  |
Lease liability | 6,717 |  |  | 6,934 |  |
Depreciation and amortization | 17,912 |  |  | 20,961 |  |
Net operating loss carryforwards | 18,395 |  |  | 18,421 |  |
Gross deferred tax assets | 109,725 |  |  | 114,048 |  |
Valuation allowance | (40,698) |  |  | (38,466) |  |
Total deferred tax assets | 69,027 |  |  | 75,582 |  |
Right of use asset | (5,910) |  |  | (6,074) |  |
Acquired intangibles and fixed assets | (4,522) |  |  | (8,395) |  |
Unrealized investment gains | (105) |  |  | (106) |  |
Tax on undistributed earnings | (118) |  |  | (110) |  |
Total deferred tax liabilities | (10,655) |  |  | (14,685) |  |
Net deferred tax assets | $ | 58,372 |  |  | $ | 60,897 |  |
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. As of December 25, 2021, we maintained a valuation allowance of $40.7 million, primarily related to California deferred tax assets and foreign tax credit carryovers, due to uncertainty about the future realization of these assets. We believe that future reversals of taxable temporary differences, and our forecast of continued earnings in both our U.S. and non-U.S. jurisdictions, support our decision to not record a valuation allowance on other deferred tax assets. Tax Credits and Carryforwards Tax credits and carryforwards available to us at December 25, 2021 consisted of the following (in thousands):
|  | Amount |  | Latest Expiration Date
Federal research and development tax credit |  | $ | 34,838 |  |  | 2024-2041
Foreign tax credit carryforwards |  | 1,029 |  |  | 2022-2027
California research credits |  | 46,993 |  |  | Indefinite
State net operating loss carryforwards |  | 250,472 |  |  | 2022-Indefinite
Singapore net operating loss carryforwards |  | 6,331 |  |  | Indefinite
Undistributed Earnings As of December 25, 2021, unremitted earnings of foreign subsidiaries was estimated at $45.0 million. We intend to permanently invest $10.0 million of undistributed earnings indefinitely outside of the U.S. To the extent we repatriate the remaining $35.0 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 change because of the complexity and variety of assumptions necessary to compute the tax. 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 25, 2021 |  | December 26, 2020 |  | December 28, 2019
Unrecognized tax benefit, beginning balance | $ | 32,497 |  |  | $ | 28,800 |  |  | $ | 25,224 |
Additions based on tax positions related to the current year | 3,201 |  |  | 3,072 |  |  | 3,679 |
Additions based on tax positions from prior years | 124 |  |  | 702 |  |  | — |
Reductions for tax positions of prior years | — |  |  | — |  |  | (5) |
Reductions due to lapse of the applicable statute of limitations | (77) |  |  | (77) |  |  | (98) |
Unrecognized tax benefit, ending balance | $ | 35,745 |  |  | $ | 32,497 |  |  | $ | 28,800 |
Interest and penalties recognized as a component of provision for income taxes | $ | 40 |  |  | $ | 50 |  |  | $ | 59 |
Interest and penalties accrued at period end | 188 |  |  | 204 |  |  | 212 |
Of the unrecognized tax benefits at December 25, 2021, $17.5 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 25, 2021, 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 25, 2021, our tax years 2018 through 2021, 2017 through 2021 and 2016 through 2021, 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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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