Income Taxes

3 Months Ended

Apr. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Note 5.    Income Taxes

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

	Three months ended
	April 2,			April 3,
(In millions)	2022			2021
Statutory federal income tax rate	21		%	21		%
Provision for income taxes at statutory rate	$	533		$	578
Increases (decreases) resulting from:
Foreign rate differential	(82)			(55)
Income tax credits	(64)			(89)
Global intangible low-taxed income	26			20
Foreign-derived intangible income	(37)			(60)
Excess tax benefits from stock options and restricted stock units	(18)			(28)
Valuation allowance	(87)			(1)
Withholding taxes	12			18
State income taxes, net of federal tax	31			49
Other, net	(13)			(16)
Provision for income taxes	$	301		$	416

The company has operations and a taxable presence in approximately 70 countries outside the U.S. The company's effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate.

Unrecognized Tax Benefits

As of April 2, 2022 and December 31, 2021, the company had $1.12 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.