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INCOME TAXES | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES. Our effective income tax rate was 14.2% and 10.6% for the nine months ended September 30, 2025 and 2024, respectively. The tax rate for 2025 was reduced compared to the U.S. statutory rate of 21% primarily due to U.S. business tax credit benefits, tax benefits on global activities, tax effects of favorable audit resolutions, realized foreign tax credits benefits on the reinsurance transaction (see Note 12), and tax benefits on equity compensation. The tax rate for 2024 was reduced compared to the U.S. statutory rate of 21% primarily due to separation income tax benefit associated with an increase in net state deferred tax assets that are likely to be utilized after the spin of GE Vernova, U.S. business tax credit benefits, and gains associated with our retained and sold ownership interests which we expect to recover without tax. On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law, which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation and repeal of non-U.S. corporations' fiscal year end. Some impacts of the OBBBA will not be realized until 2026 and forward, such as a more favorable tax rate on Foreign-Derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC Tested Income). Based on current expectations, in 2025, we may incur up to $0.1 billion of tax expense in connection with the OBBBA, which we have considered as part of the annual effective tax rate. Due to the nature of the tax law changes, the company has not realized an impact in the Statement of Operations related to deferred taxes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury. The OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar 2) that has been agreed upon in principle by over 140 countries. Since the proposal, many countries incorporated Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. In June 2025, the G7 agreed to exclude U.S. Multi-National Entities (MNEs) from certain aspects of the Pillar 2 global minimum tax rules (the G7 Statement) in exchange for the U.S. not imposing retaliatory taxes in the OBBBA. We will continue to monitor the G7 Statement, which has not yet been incorporated into the OECD framework. We continue to refine the effective tax rate and cash tax impact of Pillar 2 in light of legislative changes in multiple countries. As of September 30, 2025, we expect to incur $0.1 billion in 2025 in connection with the incorporation of the Pillar 2 model rules, which we have considered as part of the effective tax rate. The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for 2016-2020. The following table presents our net deferred tax assets and net deferred tax liabilities attributable to different tax jurisdictions or different tax paying components.
DEFERRED INCOME TAXES | September 30, 2025 | December 31, 2024
Total assets | $ | 7,254 |  | $ | 7,479 |
Total liabilities | (409) |  | (368) |
Net deferred income tax asset | $ | 6,845 |  | $ | 7,111 |

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