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INCOME TAXES
 12 Months Ended
Oct. 02, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The following table reflects U.S. and foreign income (loss) before income taxes for fiscal 2021, 2020, and 2019:
Fiscal
(in thousands)202120202019
United States $(8,853)$(14,909)$(14,125)
Foreign423,403 79,243 48,812 
Income before income taxes$414,550 $64,334 $34,687 
The following table reflects the current and deferred components of provision for (benefit from) income taxes for fiscal 2021, 2020, and 2019:
Fiscal
(in thousands)202120202019
Current:
   Federal$26,563 $5,129 $6,580 
   State261 89 214 
   Foreign30,771 6,508 6,384 
Deferred:
   Federal(2,979)(690)2,959 
   State— — — 
   Foreign(7,321)962 6,773 
Provision for income taxes$47,295 $11,998 $22,910 

The following table reconciles the provision for (benefit from) income taxes with the expected income tax provision computed based on the applicable U.S. federal statutory tax rate for fiscal 2021, 2020, and 2019:
Fiscal
(dollar amounts in thousands)202120202019
Expected income tax provision based on the U.S. federal statutory tax rate$86,915 $13,510 $7,284 
Effect of earnings of foreign subsidiaries subject to different tax rates(15,028)(1,634)(4,335)
Benefit from tax incentives(45,501)(6,781)(5,084)
Benefit from research and development tax credits(2,705)(2,915)(3,041)
Benefit from foreign tax credits(20,281)(1,701)(22,744)
U.S. one-time transition tax— — 9,369 
Remeasurement of deferred taxes— (145)5,480 
Valuation allowance(11,620)1,224 25,289 
Foreign operations (Deemed income, taxes on undistributed foreign earnings, and withholding taxes)52,414 8,886 8,578 
Unrecognized tax benefit(180)285 156 
Non-deductible items113 1,232 2,248 
Other, net3,168 37 (290)
Provision for income taxes$47,295 $11,998 $22,910 
Effective tax rate11.4 %18.6 %66.0 %
In fiscal 2021, the Company recorded tax expense primarily from domestic and foreign operations, deemed income, and undistributed foreign earnings, partially offset by tax benefits from tax incentives, tax credits and the net release of valuation allowances recorded against certain loss and credit carryforwards.
In fiscal 2020, the Company recorded tax expense primarily from domestic and foreign operations, deemed income, undistributed foreign earnings, the net increase of valuation allowances recorded against certain loss and credit carryforwards, and non-deductible expenses, partially offset by tax benefits from tax incentives and net tax credits, inclusive of an out of period adjustment of $3.5 million to correct previously unrecorded income tax expense related to prior years jurisdictional adjustments. The Company determined that the out of period adjustment to the provision for income taxes and income taxes payable was not material to its fiscal 2020 or prior period consolidated financial statements.
As of October 2, 2021, a large portion of the Company’s undistributed foreign earnings are not considered to be indefinitely reinvested outside the U.S. and are expected to be available for use in the U.S. without incurring additional U.S. income tax.
Further, we operate in a number of foreign jurisdictions, including Singapore, where we have a tax incentive that allows for a reduced tax rate on certain classes of income, provided the Company meets certain employment and investment conditions through the expiration date in fiscal 2025. In fiscal 2021, 2020, and 2019, the tax incentive arrangement helped to reduce the
Company’s provision for income taxes by $45.5 million or $0.72 per share, $6.8 million or $0.11 per share and $5.0 million or $0.08 per share, respectively.
The following table reflects deferred tax balances based on the tax effects of cumulative temporary differences for fiscal 2021 and 2020:
Fiscal
(in thousands)20212020
Accruals and reserves$11,890 $7,631 
Tax credit carryforwards (1)
4,230 6,124 
Net operating loss carryforwards28,913 37,921 
Gross deferred tax assets$45,033 $51,676 
Valuation allowance (1)
$(34,095)$(46,561)
Deferred tax assets, net of valuation allowance$10,938 $5,115 
Taxes on undistributed foreign earnings (1)
$(28,516)$(25,676)
Fixed and intangible assets465 (4,297)
Deferred tax liabilities$(28,051)$(29,973)
Net deferred tax liabilities$(17,113)$(24,858)
Reported as
Deferred tax assets$15,715 $8,147 
Deferred tax liabilities(32,828)(33,005)
Net deferred tax liabilities$(17,113)$(24,858)
(1) Certain balances in fiscal 2020 relating to foreign tax credits on undistributed foreign earnings and related valuation allowances have been reclassified to conform to the current period presentation. These reclassifications have no impact to the consolidated financial statements in fiscal 2020.
As of October 2, 2021, the Company has foreign net operating loss carryforwards of $72.8 million, state net operating loss carryforwards of $104.4 million, and U.S. federal and state tax credit carryforwards of $6.8 million that can be used to offset future income tax obligations. These net operating loss and tax credit carryforwards can be utilized prior to their expiration dates in fiscal years 2022 through 2039, except for certain credits and foreign net operating losses that can be carried forward indefinitely. The Company has recorded valuation allowances against certain foreign and state net operating loss carryforwards and state tax credits which are expected to expire unutilized.
The following table reconciles the beginning and ending balances of the Company's unrecognized tax benefit, excluding related accrued interest and penalties, for fiscal 2021, 2020, and 2019:
Fiscal
(in thousands)202120202019
Unrecognized tax benefit, beginning of year$13,064 $12,925 $13,038 
Additions for tax positions, current year4,003 537 410 
Reductions for tax positions, prior year(2,145)(398)(523)
Unrecognized tax benefit, end of year$14,922 $13,064 $12,925 
The Company recognizes interest and penalties related to potential income tax liabilities as a component of unrecognized tax benefit and in provision for income taxes. The amount of interest and penalties related to unrecognized tax benefit recorded in fiscal 2021 provision for income taxes is not material. As of October 2, 2021, the Company has recognized $1.7 million of accrued interest and penalties related to unrecognized tax benefit within the income tax payable for uncertain tax positions and approximately $15.2 million of unrecognized tax benefit, including related interest and penalties, that if recognized, would impact the Company's effective tax rate.
It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months due to the expected lapse of statutes of limitation and/or settlements of tax examinations. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we cannot practicably estimate the financial outcomes of these examinations.The Company files a U.S. federal income tax return, as well as income tax returns in various state and foreign jurisdictions. For U.S. federal income tax returns purposes, tax years from fiscal 2018 remain subject to examination. For most state tax returns, tax years following fiscal 2002 remain subject to examination as a result of the generation of net operating loss carryforwards. In the foreign jurisdictions where the Company files income tax returns, the statutes of limitations with respect to these jurisdictions vary from jurisdiction to jurisdiction and range from 4 to 6 years. The Company's tax returns are currently under examination by tax authorities in multiple state and foreign jurisdictions. The Company believes that adequate provisions have been made for any adjustments that may result from the examination.