Income Taxes

6 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rate was 25.5% for the second quarter of fiscal 2022 and (132.8)% for the second quarter of fiscal 2021. The effective income tax rate was 25.7% for the first six months of fiscal 2022 and 23.2% for the first six months of fiscal 2021. The increase in the effective income tax rate for the quarter and six month period was primarily due to the decrease of anticipated benefit from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020 in the second quarter of fiscal 2021.

TJX had net unrecognized tax benefits of $280 million as of July 31, 2021, $272 million as of January 30, 2021 and $262 million as of August 1, 2020.

TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In the U.S. and India, fiscal years through 2010 are no longer subject to examination. In all other jurisdictions, fiscal years through 2011 are no longer subject to examination.

TJX’s accounting policy classifies interest and penalties related to income tax matters as part of income tax expense. The total accrued amount on the Consolidated Balance Sheets for interest and penalties was $40 million as of July 31, 2021, $36 million as of January 30, 2021 and $32 million as of August 1, 2020.

Based on the outcome of tax examinations or judicial or administrative proceedings, or as a result of the expiration of statutes of limitations in specific jurisdictions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those presented in the Consolidated Financial Statements. During the next 12 months, it is reasonably possible that tax examinations of prior years’ tax returns or judicial or administrative proceedings that reflect such positions taken by TJX may be finalized. As a result, the total net amount of unrecognized tax benefits may decrease, which would reduce the provision for taxes on earnings, by a range of zero to $43 million.