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Income Taxes
9 Months Ended
Sep. 26, 2020
Income Tax Disclosure [Abstract]  
Income Tax Disclosure INCOME TAXES
During Cadence’s third quarter of fiscal 2020, the State of California enacted legislation that, for a three-year period beginning in fiscal 2020, will limit Cadence’s utilization of California research and development tax credits to $5 million annually and will suspend the use of California net operating loss deductions. Due to the tax law change, Cadence intends to make certain tax elections in its fiscal 2019 California income tax return, which allowed Cadence to release approximately $19.0 million of valuation allowance on Cadence’s California research and development tax credit deferred tax assets. Cadence recognized the release of the valuation allowance as a discrete tax benefit during the third quarter of fiscal 2020. Cadence continues to record a valuation allowance on its remaining California research and development tax credit carryforwards.
Cadence’s provision for income taxes of $4.1 million and $29.7 million for the three and nine months ended September 26, 2020, respectively, was primarily related to the federal, state and foreign income taxes on anticipated fiscal 2020 income, partially offset by the tax benefit of $19.0 million for the three and nine months ended September 26, 2020, related to the partial release of the valuation allowance on its California research and development tax credit deferred tax assets, and tax benefits of $19.3 million and $49.0 million for the three and nine months ended September 26, 2020, respectively, related to stock-based compensation that vested or was exercised during the period.