v3.26.3
Income Taxes
 12 Months Ended
Sep. 26, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
European Commission State Aid Decision
On August 30, 2016, the Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of two subsidiaries of the Company (“State Aid Decision”). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward.
The Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (“General Court”). On July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court’s decision to the European Court of Justice (“ECJ”). On September 10, 2024, the ECJ announced that it had set aside the 2020 judgment of the General Court and confirmed the Commission’s 2016 State Aid Decision. As a result, during the fourth quarter of 2024 the Company recorded a one-time income tax charge of $10.2 billion, net, which represented $15.8 billion payable to Ireland via release of amounts held in escrow, partially offset by a U.S. foreign tax credit of $4.8 billion and a decrease in unrecognized tax benefits of $823 million.
Income Before Provision for Income Taxes
Income before provision for income taxes for 2026, 2025 and 2024 consisted of the following (in millions):
202620252024
Domestic$63,732 $50,722 $46,169 
Foreign95,505 82,007 77,316 
Income before provision for income taxes
$159,237 $132,729 $123,485 
Provision for Income Taxes and Effective Tax Rate
The provision for income taxes for 2026, 2025 and 2024 consisted of the following (in millions):
202620252024
Federal:
Current$11,307 $11,487 $5,571 
Deferred594 (1,804)(3,080)
Total11,901 9,683 2,491 
State and local:
Current2,409 1,680 1,726 
Deferred(36)(139)(298)
Total2,373 1,541 1,428 
Foreign:
Current12,625 8,891 25,483 
Deferred163 604 347 
Total12,788 9,495 25,830 
Provision for income taxes$27,062 $20,719 $29,749 
A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for 2026 is as follows (dollars in millions):
2026
AmountPercent
Computed statutory federal income tax$33,440 21.0 %
Foreign tax effects:
Ireland
Tax rate difference(3,464)(2.2)%
Other897 0.6 %
Singapore
Tax rate difference, including incentives(5,492)(3.4)%
Qualified Domestic Minimum Top-up Tax2,510 1.6 %
Other311 0.2 %
Other foreign jurisdictions2,341 1.5 %
Effect of cross-border tax laws(2,307)(1.5)%
Tax credits:
Research and development credits(1,894)(1.2)%
Other(273)(0.2)%
Other993 0.6 %
Provision for income taxes$27,062 17.0 %
A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (21% in 2025 and 2024) to income before provision for income taxes for 2025 and 2024 is as follows (dollars in millions):
20252024
Computed expected tax$27,873 $25,932 
Earnings of foreign subsidiaries(8,120)(5,311)
Change in valuation allowance
2,091 — 
Research and development credit, net(1,049)(1,397)
Impact of the State Aid Decision
(486)10,246 
Other410 279 
Provision for income taxes$20,719 $29,749 
Effective tax rate15.6%24.1%
Deferred Tax Assets and Liabilities
As of September 26, 2026 and September 27, 2025, the significant components of the Company’s deferred tax assets and liabilities were as follows (in millions):
20262025
Deferred tax assets:
Capitalized research and development$13,656 $15,041 
Tax credit carryforwards10,046 8,643 
Accrued liabilities and other reserves6,678 6,154 
Deferred revenue2,797 2,953 
Lease liabilities2,643 2,577 
Other3,579 3,049 
Total deferred tax assets39,399 38,417 
Less: Valuation allowance(13,260)(10,966)
Total deferred tax assets, net26,139 27,451 
Deferred tax liabilities:
Depreciation2,379 3,276 
Right-of-use assets2,331 2,300 
Minimum tax on foreign earnings1,089 1,217 
Other812 678 
Total deferred tax liabilities6,611 7,471 
Net deferred tax assets$19,528 $19,980 
As of September 26, 2026, the Company had $5.4 billion in California R&D credit carryforwards and $4.6 billion in foreign tax credit carryforwards in Ireland, both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary differences.
Uncertain Tax Positions
As of September 26, 2026, the total amount of gross unrecognized tax benefits was $22.5 billion, of which $10.6 billion, if recognized, would impact the Company’s effective tax rate. As of September 27, 2025, the total amount of gross unrecognized tax benefits was $23.2 billion, of which $10.6 billion, if recognized, would have impacted the Company’s effective tax rate.
The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2026, 2025 and 2024 is as follows (in millions):
202620252024
Beginning balances$23,242 $22,038 $19,454 
Increases related to tax positions taken during a prior year1,267 1,971 1,727 
Decreases related to tax positions taken during a prior year(2,827)(71)(386)
Increases related to tax positions taken during the current year4,068 3,795 2,542 
Decreases related to settlements with taxing authorities(264)(2,939)(1,070)
Decreases related to expiration of the statute of limitations(2,999)(1,552)(229)
Ending balances$22,487 $23,242 $22,038 
The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. Tax years 2018 and after 2021 for the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination.
Cash Paid for Income Taxes
Cash paid for income taxes, net in 2026 consisted of the following (in millions):
2026
Federal$19,011 
State and local1,669 
Foreign:
Ireland4,956 
Singapore3,253 
Other5,699 
Total$34,588 
Cash paid for income taxes, net was $43.4 billion and $26.1 billion in 2025 and 2024, respectively.