|3 Months Ended|
Mar. 27, 2021
|Income Tax Disclosure [Abstract]|
|Income Taxes||Income Taxes
The Company recorded an income tax provision of $89 million and $6 million for the three months ended March 27, 2021 and March 28, 2020, respectively, representing effective tax rates of 13.8% and 3.3%, respectively.
The increase in income tax expense and effective tax rate was due to significantly higher income in the United States in the current period, partially offset by the foreign derived intangible income benefit, research and development tax credits, and excess tax benefit for stock-based compensation. The lower income tax expense and effective tax rate for the prior year period was due to a full valuation allowance in the United States during 2020, a significant portion of which was released by the Company in the fourth quarter of 2020.
The Company’s effective tax rate for the three months ended March 27, 2021 and March 28, 2020 was lower than the United States federal statutory rate primarily due to the tax benefits recognized for the three months ended March 27, 2021 discussed above, and due to the maintenance of a full valuation allowance during the three months ended March 28, 2020.
As of March 27, 2021, the Company continues to maintain a valuation allowance for certain federal, state, and foreign tax attributes. The federal valuation allowance maintained is due to limitations under Internal Revenue Code Section 382 or 383, separate return loss year rules, or dual consolidated loss rules. The state and foreign valuation allowance maintained is due to a lack of sufficient sources of taxable income.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef