Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.25.3
Income Taxes
 9 Months Ended
Sep. 27, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 7 : Income Taxes
Three Months Ended Nine Months Ended
($ In Millions)
 Sep 27, 2025 Sep 28, 2024 Sep 27, 2025 Sep 28, 2024
Income (loss) before taxes $ 4,574  $ (9,086) $ 1,219  $ (11,809)
Provision for (benefit from) taxes $ 304  $ 7,903  $ 860  $ 7,271 
Effective tax rate
 6.6  % (87.0) % 70.5  % (61.6) %
In the three and nine months ended September 27, 2025, our provision for income taxes was determined using our estimated annual effective tax rate applied to our year-to-date ordinary income (loss) before taxes, adjusted for discrete items. We were not able to benefit from our current year domestic loss before taxes due to the domestic valuation allowance first established in the third quarter of 2024. Additionally, our financial statements as of September 27, 2025 and September 28, 2024 contain certain tax receivables of $2.7 billion and $845 million, respectively, within other current assets, and $5.3 billion and $1.7 billion, respectively, within other long-term assets associated with income tax overpayments and AMIC claims.
In the three and nine months ended September 28, 2024, due to our inability to reliably forecast our annual income, our provision for income taxes was determined using a three and nine month actual annual effective tax rate, respectively, adjusted for discrete items. In addition, we established a valuation allowance of $9.9 billion as a discrete non-cash tax expense against our U.S. deferred tax assets. We assess the recoverability of our deferred tax assets quarterly, weighing available positive and negative evidence. As a result of our assessment in the third quarter of 2024, we determined it was not more likely than not that the deferred tax assets will not be recoverable based upon our three-year cumulative historical loss position as of September 28, 2024, largely resulting from the asset impairment and restructuring and other charges incurred during that quarter.
On July 4, 2025, the One Big Beautiful Bill Act (the Act) was signed into law. The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing, increases the AMIC credit rate to 35 percent from 25 percent for qualifying assets, and makes modifications to the international tax framework. The Act includes multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. We continue to evaluate the impact of the Act's provisions that take effect in future years.