INTEL CORPINTC
INTEL CORP Income Taxes Disclosure
| Note 8 : | Income Taxes | ||||
Provision for (Benefit From) Taxes
| Years Ended ($ In Millions) | Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | |||||||||||||||||
Income (losses) before taxes: | ||||||||||||||||||||
U.S. | $ | (3,231) | $ | (13,450) | $ | (4,749) | ||||||||||||||
Non-U.S. | 4,788 | 2,241 | 5,511 | |||||||||||||||||
| Total income before taxes | $ | 1,557 | $ | (11,210) | $ | 762 | ||||||||||||||
| Provision for (benefit from) taxes: | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | 310 | $ | 600 | $ | 538 | ||||||||||||||
| State | (18) | (8) | 23 | |||||||||||||||||
Non-U.S. | 910 | 1,364 | 535 | |||||||||||||||||
| Total current provision for (benefit from) taxes | 1,202 | 1,956 | 1,096 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | 245 | 6,192 | (2,048) | |||||||||||||||||
| State | (11) | 67 | (21) | |||||||||||||||||
Non-U.S. | 95 | (192) | 60 | |||||||||||||||||
| Total deferred provision for (benefit from) taxes | 329 | 6,067 | (2,009) | |||||||||||||||||
| Total provision for (benefit from) taxes | $ | 1,531 | $ | 8,023 | $ | (913) | ||||||||||||||
| Effective tax rate | 98.3 | % | 71.6 | % | (119.8) | % | ||||||||||||||
We adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with the year ended December 27, 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended December 27, 2025:
| Dec 27, 2025 | ||||||||||||||
| Year Ended ($ In Millions) | Amount | Percent | ||||||||||||
| U.S. federal statutory tax | $ | 327 | 21.0 | % | ||||||||||
| State and local income tax, net of federal income tax effect | (23) | (1.5) | % | |||||||||||
| Foreign tax effects: | ||||||||||||||
| China: | ||||||||||||||
| Withholding tax | 314 | 20.2 | % | |||||||||||
| Other adjustments | (51) | (3.3) | % | |||||||||||
| Other foreign jurisdictions | (205) | (13.2) | % | |||||||||||
| Effects of cross-border tax laws: | ||||||||||||||
| Subpart F income inclusion | 248 | 15.9 | % | |||||||||||
| Foreign tax credit | (707) | (45.4) | % | |||||||||||
| Other | 145 | 9.3 | % | |||||||||||
| Tax credits: | ||||||||||||||
| Research and development credit | (977) | (62.7) | % | |||||||||||
| Changes in valuation allowances | 2,629 | 168.9 | % | |||||||||||
| Nontaxable or nondeductible items: | ||||||||||||||
| Share-based compensation | 120 | 7.7 | % | |||||||||||
| Altera divestiture and deconsolidation | (1,357) | (87.2) | % | |||||||||||
| Mark to market on equity securities | 377 | 24.2 | % | |||||||||||
| Other | 97 | 6.2 | % | |||||||||||
| Changes in unrecognized tax benefits | 334 | 21.5 | % | |||||||||||
| Other adjustments | 260 | 16.7 | % | |||||||||||
| Global effective tax | $ | 1,531 | 98.3 | % | ||||||||||
The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate to the actual global effective income tax rate for the years ended December 28, 2024 and December 30, 2023:
Years Ended | Dec 28, 2024 | Dec 30, 2023 | ||||||||||||
Expected provision (benefit) at statutory federal income tax rate | (21.0) | % | 21.0 | % | ||||||||||
| Increase (reduction) in rate resulting from: | ||||||||||||||
Federal valuation allowance | 93.2 | — | ||||||||||||
Goodwill impairment | 2.1 | — | ||||||||||||
Share-based compensation | 4.2 | 34.3 | ||||||||||||
| Unrecognized tax benefits and settlements | 1.3 | 16.3 | ||||||||||||
Non-U.S. income taxed at different rates | (5.3) | (60.6) | ||||||||||||
| Research and development tax credits | (5.6) | (99.0) | ||||||||||||
Foreign derived intangible income benefit | — | (25.1) | ||||||||||||
Restructuring of certain non-U.S. subsidiaries | — | (15.8) | ||||||||||||
Non-deductibility of European Commission fine | — | 11.1 | ||||||||||||
| Other | 2.7 | (2.0) | ||||||||||||
| Effective tax rate | 71.6 | % | (119.8) | % | ||||||||||
On July 4, 2025, the One Big Beautiful Bill Act (Act) was signed into law. The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100 percent bonus depreciation, domestic research cost expensing, increases the AMIC to 35 percent from 25 percent 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.
As noted in the 2025 rate reconciliation above, we derive the effective tax rate benefit, or detriment, attributed to non-U.S. income taxed at different rates primarily from our operations in China, among others. We are subject to reduced tax rates in Israel and Malaysia as long as we conduct certain eligible activities and make certain capital investments. We have conditional reduced tax rates that expire at various dates through 2056, and we expect to apply for renewals upon expiration, if available. In 2025, the tax benefit specifically attributable to tax holidays was $79 million ($67 million in 2024 and $129 million in 2023) with a $0.02 benefit to diluted EPS ($0.02 in 2024 and $0.03 in 2023).
Deferred and Current Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets and liabilities at the end of each period were as follows:
(In Millions) | Dec 27, 2025 | Dec 28, 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| R&D expenditures capitalization | $ | 12,203 | $ | 10,709 | ||||||||||
| State credits and net operating losses | 3,165 | 2,830 | ||||||||||||
| Inventory | 628 | 1,054 | ||||||||||||
| Accrued compensation and other benefits | 921 | 970 | ||||||||||||
| Share-based compensation | 481 | 444 | ||||||||||||
| Litigation charge | 320 | 447 | ||||||||||||
| Other, net | 1,547 | 1,510 | ||||||||||||
| Gross deferred tax assets | 19,265 | 17,964 | ||||||||||||
| Valuation allowance | (16,402) | (13,974) | ||||||||||||
| Total deferred tax assets | 2,863 | 3,990 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
Property, plant and equipment | (3,294) | (4,063) | ||||||||||||
| Licenses and intangibles | (466) | (159) | ||||||||||||
| Unrealized gains on investments and derivatives | (168) | (224) | ||||||||||||
| Other, net | (51) | (403) | ||||||||||||
| Total deferred tax liabilities | (3,979) | (4,849) | ||||||||||||
| Net deferred tax assets (liabilities) | $ | (1,116) | $ | (859) | ||||||||||
| Reported as: | ||||||||||||||
| Deferred tax assets | $ | 570 | $ | 603 | ||||||||||
| Deferred tax liabilities | (1,686) | (1,462) | ||||||||||||
| Net deferred tax assets (liabilities) | $ | (1,116) | $ | (859) | ||||||||||
Changes in the valuation allowance for deferred tax assets were as follows:
| Years Ended (In Millions) | Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | |||||||||||||||||
Balance at Beginning of Year | $ | 13,974 | $ | 3,047 | $ | 2,586 | ||||||||||||||
Additions charged to expenses/other accounts | 2,428 | 10,927 | 461 | |||||||||||||||||
(Deductions) recoveries, net | — | — | — | |||||||||||||||||
Balance at End of Year | $ | 16,402 | $ | 13,974 | $ | 3,047 | ||||||||||||||
Deferred tax assets are included within other long-term assets on the Consolidated Balance Sheets. Deferred tax liabilities are included within other long-term liabilities on the Consolidated Balance Sheets.
The $2.4 billion change in valuation allowance from December 28, 2024 to December 27, 2025 is substantially attributable to the uncertainty regarding the realizability of our U.S. deferred tax assets.
As of December 27, 2025, our federal and non-U.S. net operating loss carryforwards for income tax purposes were $261 million and $2.9 billion, respectively. The majority of the federal and non-U.S. net operating loss carryforwards have no expiration date. The remaining federal and non-U.S. net operating loss carryforwards expire at various dates through 2040.
As of December 27, 2025, we have undistributed earnings of certain foreign subsidiaries of $22.2 billion that we have indefinitely invested, and on which we have not recognized deferred taxes. Estimating the amount of potential tax is not practicable because of the complexity and variety of assumptions necessary to compute the tax.
Current income taxes receivable of $7.6 billion as of December 27, 2025 ($2.6 billion as of December 28, 2024) are included in other current assets.
Long-term income taxes payable of $1.5 billion as of December 27, 2025 ($1.6 billion as of December 28, 2024) are primarily composed of uncertain tax positions, reduced by the associated deduction for state taxes and non-U.S. tax credits.
Uncertain Tax Positions
| Years Ended (In Millions) | Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | |||||||||||||||||
| Beginning gross unrecognized tax benefits | $ | 1,130 | $ | 1,124 | $ | 1,229 | ||||||||||||||
| Settlements and effective settlements with tax authorities | (52) | (59) | (288) | |||||||||||||||||
| Changes in balances related to tax position taken during prior periods | 201 | (8) | — | |||||||||||||||||
| Changes in balances related to tax position taken during current period | 105 | 73 | 183 | |||||||||||||||||
| Ending gross unrecognized tax benefits | $ | 1,384 | $ | 1,130 | $ | 1,124 | ||||||||||||||
If the remaining balance of unrecognized tax benefits were recognized in a future period, it would result in a tax benefit of $949 million as of December 27, 2025 ($946 million as of December 28, 2024) and a reduction in the effective tax rate. Interest, penalties and accrued interest related to unrecognized tax benefits were insignificant in the periods presented.
We file federal, state and non-U.S. tax returns. We are no longer subject to U.S. federal and non-U.S. tax examinations for years prior to 2018 and 2015, respectively. For U.S. state tax returns, we are no longer subject to tax examination for years prior to 2015.
Cash Taxes Paid
We adopted ASU 2023-09 on a prospective basis for the year ended December 27, 2025 and have included the following table as a result of our adoption, which presents income taxes paid (net of refunds received) for the year ended December 27, 2025:
| Year Ended (In Millions) | Dec 27, 2025 | |||||||
| Federal taxes | $ | 1,393 | ||||||
| State taxes | (7) | |||||||
| Foreign taxes: | ||||||||
| China | 276 | |||||||
| Israel | 197 | |||||||
| Other foreign jurisdictions | 440 | |||||||
| Total cash taxes paid | $ | 2,299 | ||||||
Below is a summary of income taxes paid for the years ended December 28, 2024 and December 30, 2023:
Years Ended (In Millions) | Dec 28, 2024 | Dec 30, 2023 | ||||||||||||
Cash paid during the year for: | ||||||||||||||
Income taxes, net of refunds | $ | 2,202 | $ | 2,621 | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 23, 2026 | Showing above |
| 2024 | Jan 31, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Jan 27, 2023 | |
| 2021 | Jan 27, 2022 | |
| 2020 | Jan 22, 2021 | |
| 2019 | Jan 24, 2020 | |
| 2018 | Feb 1, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 12, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.