v3.25.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Components of Cash Paid for Income Taxes
The following table shows supplemental cash flow information (in millions):
Year Ended December 31,
202320242025
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt, net of capitalized interest$2,608 $1,858 $1,458 
Cash paid for operating leases10,453 12,341 15,038 
Cash paid for interest on finance leases308 287 295 
Cash paid for interest on financing obligations196 219 196 
Cash paid for income taxes, net of refunds11,179 12,308 8,295 
Assets acquired under operating leases14,052 15,424 19,930 
Property and equipment acquired under finance leases, net of remeasurements and modifications642 854 2,911 
Increase (decrease) in property and equipment acquired but not yet paid(1,414)7,039 10,155 
The components of cash paid for income taxes, net of refunds, are as follows (in millions):
 Year Ended December 31,
202320242025
U.S. Federal$7,435 $7,630 $2,751 
U.S. State2,070 2,450 2,125 
International1,674 2,228 3,419 
Total cash taxes paid, net of refunds$11,179 $12,308 $8,295 
Components of Provision for Income Taxes, Net
The components of the provision for income taxes, net are as follows (in millions):
 Year Ended December 31,
202320242025
U.S. Federal:
Current$8,652 $9,039 $1,220 
Deferred(5,505)(4,101)11,134 
Total3,147 4,938 12,354 
U.S. State:
Current2,158 2,109 2,067 
Deferred(498)(453)984 
Total1,660 1,656 3,051 
International:
Current2,186 2,765 4,330 
Deferred127 (94)(648)
Total2,313 2,671 3,682 
Provision for income taxes, net$7,120 $9,265 $19,087 
Components of Income Before Income Taxes, Domestic and Foreign
U.S. and international components of income before income taxes are as follows (in millions):
 Year Ended December 31,
 202320242025
U.S.$32,328 $61,947 $89,537 
International5,229 6,667 7,774 
Income before income taxes$37,557 $68,614 $97,311 
Effective Income Tax Rate Reconciliation
The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows (in millions, except percentages):
 Year Ended December 31,
 202320242025
Income taxes computed at the federal statutory rate$7,887 21.0 %$14,409 21.0 %$20,435 21.0 %
Federal:
Tax credits:
Research and development tax credits(2,196)(5.8)(2,644)(3.9)(2,403)(2.5)
Foreign tax credits(558)(1.5)(440)(0.6)(642)(0.7)
Other credits(185)(0.5)(176)(0.3)(139)(0.1)
Effect of cross-border tax laws:
Foreign income deduction (1)(1,429)(3.8)(2,379)(3.5)(522)(0.5)
Other effects of cross-border tax laws(18)— (33)— (271)(0.3)
Nontaxable and nondeductible items:
Stock-based compensation (2)784 2.1 (2,236)(3.3)(2,029)(2.1)
Other nontaxable and nondeductible items 162 0.4 158 0.3 372 0.4 
Other186 0.5 33 — 486 0.5 
State and local income taxes, net of federal effect (3)1,292 3.4 1,321 1.9 2,455 2.5 
Foreign tax effects1,117 3.0 1,150 1.7 1,517 1.6 
Worldwide changes in prior period unrecognized tax benefits78 0.2 102 0.2 (172)(0.2)
Total$7,120 19.0 %$9,265 13.5 %$19,087 19.6 %
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(1)U.S. companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived Intangible Income deduction and is dependent on the amount of our U.S. taxable income.
(2)Includes amounts related to non-taxable and non-deductible stock-based compensation, in addition to excess tax benefits or shortfalls from stock-based compensation. Our tax provision includes $519 million of tax shortfalls from stock-based compensation for 2023, and $2.8 billion and $2.6 billion of excess tax benefits from stock-based compensation for 2024 and 2025.
(3)The jurisdictions that contribute to the majority of the tax effect in this category are Illinois, Maryland, New Jersey, New York, Pennsylvania, and Virginia.
Deferred Tax Assets and Liabilities
Deferred income tax assets and liabilities are as follows (in millions):
 December 31,
 20242025
Deferred tax assets (1):
Loss carryforwards U.S. - Federal/States$692 $632 
Loss carryforwards - Foreign2,687 2,936 
Accrued liabilities, reserves, and other expenses4,254 5,545 
Stock-based compensation4,089 4,295 
Depreciation and amortization1,133 1,503 
Operating lease liabilities20,921 23,596 
Capitalized research and development22,701 18,725 
Other items1,688 2,166 
Tax credits1,773 2,812 
Total gross deferred tax assets59,938 62,210 
Less valuation allowances (2)(4,893)(5,560)
Deferred tax assets, net of valuation allowances55,045 56,650 
Deferred tax liabilities:
Depreciation and amortization(16,240)(23,159)
Operating lease assets(19,517)(22,177)
Assets held for investment(2,133)(13,149)
Other items(1,190)(1,159)
Net deferred tax assets (liabilities), net of valuation allowances$15,965 $(2,994)
 ___________________
(1)Deferred tax assets are presented after tax effects and net of tax contingencies.
(2)Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions or future capital gains, as well as tax credits.
Reconciliation of Income Tax Contingencies
The reconciliation of our income tax contingencies is as follows (in millions):
 December 31,
 202320242025
Gross tax contingencies – January 1$4,002 $5,228 $6,485 
Gross increases to tax positions in prior periods440 154 310 
Gross decreases to tax positions in prior periods(38)(129)(1,180)
Gross increases to current period tax positions1,009 1,392 1,292 
Settlements with tax authorities(106)(9)(312)
Lapse of statute of limitations(79)(151)(29)
Gross tax contingencies – December 31 (1)$5,228 $6,485 $6,566 
 ___________________
(1)As of December 31, 2025, we had approximately $6.6 billion of income tax contingencies of which $5.0 billion, if fully recognized, would decrease our effective tax rate.