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Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Taxes
Taxes
Income Taxes
Year ended December 31
202420232022
Income tax expense (benefit)
U.S. federal
Current$854 $895 $1,723 
Deferred748 666 2,240 
State and local
Current275 211 482 
Deferred10 1 39 
Total United States1,887 1,773 4,484 
International
Current7,388 6,745 9,738 
Deferred482 (345)(156)
Total International7,870 6,400 9,582 
Total income tax expense (benefit)$9,757 $8,173 $14,066 
The reconciliation between the U.S. statutory federal income tax rate and the company’s effective income tax rate is detailed in the following table:
Year ended December 31
202420232022
Income (loss) before income taxes
 United States$8,056 $8,565 $21,005 
 International19,450 21,019 28,669 
Total income (loss) before income taxes27,506 29,584 49,674 
Theoretical tax (at U.S. statutory rate of 21%)5,776 6,213 10,432 
Equity affiliate accounting effect(845)(1,072)(1,678)
Effect of income taxes from international operations4,742 3,001 5,041 
State and local taxes on income, net of U.S. federal income tax benefit
214 252 508 
Prior year tax adjustments, claims and settlements 1
(30)(32)(90)
Tax credits(28)(20)(6)
Other U.S. 1, 2
(72)(169)(141)
Total income tax expense (benefit)$9,757 $8,173 $14,066 
Effective income tax rate 3
35.5 %27.6 %28.3 %
1 Includes one-time tax costs (benefits) associated with changes in uncertain tax positions.
2 Includes one-time tax costs (benefits) associated with changes in valuation allowances (2024 - $(12); 2023 - $(84); 2022 - $(36)).
3 The company’s effective tax rate is reflective of equity income reported on an after-tax basis as part of the “Total Income (Loss) Before Income Tax Expense,” in accordance with U.S. Generally Accepted Accounting Principles. Chevron’s share of its equity affiliates’ total income tax expense in 2024 was $1,286.
The 2024 increase in income tax expense of $1,584 and the change in the company’s effective tax rate from 27.6 percent in 2023 to 35.5 percent in 2024 were primarily a result of the tax impacts from the asset sales in Canada.
The company records its deferred taxes on a tax-jurisdiction basis. The reported deferred tax balances are composed of the following:
At December 31
20242023
Deferred tax liabilities
Properties, plant and equipment$20,648 $20,303 
Investments and other5,254 4,263 
Total deferred tax liabilities25,902 24,566 
Deferred tax assets
Foreign tax credits(15,261)(13,560)
Asset retirement obligations/environmental reserves(4,220)(4,543)
Employee benefits(2,050)(1,785)
Deferred credits(292)(268)
Tax loss carryforwards(3,034)(3,492)
Other accrued liabilities(1,137)(1,416)
Inventory(68)(126)
Operating leases (1,352)(1,479)
Miscellaneous(4,180)(3,652)
Total deferred tax assets(31,594)(30,321)
Deferred tax assets valuation allowance21,313 20,416 
Total deferred income taxes, net$15,621 $14,661 
Deferred tax liabilities increased by $1,336 from year-end 2023, driven by deferred tax impacts resulting from the asset sales in Canada and foreign exchange impacts. Deferred tax assets increased by $1,273 from year-end 2023. This increase was primarily related to increases in foreign tax credits and foreign exchange impacts, partially offset by decreases in tax loss carryforwards and other accrued liabilities.
The overall valuation allowance, which increased by $897 from year-end 2023, relates to deferred tax assets for U.S. foreign tax credit carryforwards, tax loss carryforwards and temporary differences. The valuation allowance reduces the deferred tax assets to amounts that are, in management’s assessment, more likely than not to be realized. At the end of 2024, the company had gross tax loss carryforwards of approximately $9,231 and tax credit carryforwards of approximately $288, primarily related to various international tax jurisdictions. Whereas some of these tax loss carryforwards do not have an expiration date, others expire at various times from 2025 through 2043. U.S. foreign tax credit carryforwards of $15,261 will expire between 2025 and 2034.
At December 31, 2024 and 2023, deferred taxes were classified on the Consolidated Balance Sheet as follows:
At December 31
20242023
Deferred charges and other assets$(3,516)$(4,169)
Noncurrent deferred income taxes19,137 18,830 
Total deferred income taxes, net$15,621 $14,661 
Income taxes, including U.S. state and foreign withholding taxes, are not accrued for unremitted earnings of international operations that have been or are intended to be reinvested indefinitely, or where no taxable temporary differences exist that are attributable to an investment in a foreign entity. The indefinite reinvestment assertion continues to apply for the purpose of determining deferred tax liabilities for U.S. state and foreign withholding tax purposes. It is not practicable to estimate the amount of state and foreign withholding taxes that might be payable on the possible remittance of earnings that are intended to be reinvested indefinitely. The company does not anticipate incurring significant additional taxes on remittances of earnings that are not indefinitely reinvested.
Uncertain Income Tax Positions The company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is more likely than not (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” in the accounting standards for income taxes refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods.
The following table indicates the changes to the company’s unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022. The term “unrecognized tax benefits” in the accounting standards for income taxes refers to the
differences between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in the financial statements. Interest and penalties are not included.
202420232022
Balance at January 1$5,452 $5,323 $5,288 
Foreign currency effects— (27)(2)
Additions based on tax positions taken in current year236 248 30 
Additions for tax positions taken in prior years
101 265 234 
Reductions based on tax positions taken in current year(54)(104)— 
Reductions for tax positions taken in prior years
(883)(251)(117)
 Settlements with taxing authorities in current year — (2)(110)
Balance at December 31$4,852 $5,452 $5,323 
Approximately 76 percent of the $4,852 of unrecognized tax benefits at December 31, 2024, would have an impact on the effective tax rate if subsequently recognized. Certain of these unrecognized tax benefits relate to tax carryforwards that may require a full valuation allowance at the time of any such recognition.
The company and its subsidiaries are subject to income taxation and audits throughout the world. With certain exceptions, income tax examinations are completed through 2016 for the United States and 2007 for other major jurisdictions.
The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcome of these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. Of the amount of unrecognized tax benefits the company has identified as of December 31, 2024, it is reasonably possible that developments on tax matters in certain tax jurisdictions may result in decreases of approximately 68 percent within the next 12 months. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.
On the Consolidated Statement of Income, the company reports interest and penalties related to liabilities for uncertain tax positions as “Income Tax Expense (Benefit).” As of December 31, 2024, accrued expense of $268 for anticipated interest and penalties was included on the Consolidated Balance Sheet, compared with accrued expense of $229 as of year-end 2023. Income tax expense (benefit) associated with interest and penalties was $40, $124 and $152 in 2024, 2023 and 2022, respectively.
Taxes Other Than on Income
Year ended December 31
202420232022
United States
Import duties and other levies$8 $(9)$10 
Property and other miscellaneous taxes
977 818 609 
Payroll taxes296 286 248 
Taxes on production842 801 989 
Total United States2,123 1,896 1,856 
International
Import duties and other levies90 72 63 
Property and other miscellaneous taxes
2,283 2,004 1,789 
Payroll taxes125 121 122 
Taxes on production95 127 202 
Total International2,593 2,324 2,176 
Total taxes other than on income$4,716 $4,220 $4,032