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Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2020
Income Tax Examination [Line Items]  
Income Tax Disclosure [Text Block] Income Taxes
The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The components of the provision for income taxes for the years ended December 31 are as follows:
(in millions)202020192018
Current Provision:  
Federal$4,098 $2,629 $2,897 
State and local392 319 219 
Foreign491 564 404 
Total current provision4,981 3,512 3,520 
Deferred (benefit) provision(8)230 42 
Total provision for income taxes$4,973 $3,742 $3,562 
The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the years ended December 31 is as follows:
(in millions, except percentages)202020192018
Tax provision at the U.S. federal statutory rate$4,356 21.0 %$3,776 21.0 %$3,348 21.0 %
State income taxes, net of federal benefit315 1.5 271 1.5 168 1.0 
Share-based awards - excess tax benefit(130)(0.6)(132)(0.7)(161)(1.0)
Non-deductible compensation134 0.7 119 0.7 117 0.7 
Health insurance tax626 3.0 — — 552 3.5 
Foreign rate differential(164)(0.8)(214)(1.2)(203)(1.3)
Other, net(164)(0.8)(78)(0.5)(259)(1.6)
Provision for income taxes$4,973 24.0 %$3,742 20.8 %$3,562 22.3 %
Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The components of deferred income tax assets and liabilities as of December 31 are as follows:
(in millions)20202019
Deferred income tax assets:  
Accrued expenses and allowances$815 $654 
U.S. federal and state net operating loss carryforwards276 260 
Share-based compensation
98 97 
Nondeductible liabilities
252 184 
Non-U.S. tax loss carryforwards
340 420 
Lease liability
1,200 892 
Other-domestic
126 179 
Other-non-U.S.
454 329 
Subtotal3,561 3,015 
Less: valuation allowances(170)(147)
Total deferred income tax assets3,391 2,868 
Deferred income tax liabilities:
U.S. federal and state intangible assets(2,588)(2,370)
Non-U.S. goodwill and intangible assets(606)(735)
Capitalized software
(731)(683)
Depreciation and amortization
(346)(301)
Prepaid expenses(216)(172)
Outside basis in partnerships
(342)(317)
Lease right-of-use asset
(1,179)(887)
Net unrealized gains on investments(400)(177)
Other-non-U.S.
(350)(219)
Total deferred income tax liabilities(6,758)(5,861)
Net deferred income tax liabilities$(3,367)$(2,993)
Valuation allowances are provided when it is considered more likely than not deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S. net operating loss carryforwards. Gross federal net operating loss carryforwards of $100 million expire beginning in 2023 through 2037 and $309 million have an indefinite carryforward period; state net operating loss carryforwards expire beginning in 2021 through 2040, with some having an indefinite carryforward period. Substantially all of the non-U.S. tax loss carryforwards have indefinite carryforward periods.
As of December 31, 2020, the Company’s undistributed earnings from non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations, and therefore no U.S. deferred taxes have been recorded. Taxes payable on the remittance of such earnings would be minimal.
A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31 is as follows:
(in millions)202020192018
Gross unrecognized tax benefits, beginning of period$1,423 $1,056 $598 
Gross increases:   
Current year tax positions
416 512 487 
Prior year tax positions
120 2 87 
Gross decreases:   
Prior year tax positions
(130)(96)(84)
Settlements— (46)(20)
Statute of limitations lapses
— (5)(12)
Gross unrecognized tax benefits, end of period$1,829 $1,423 $1,056 
The Company believes it is reasonably possible its liability for unrecognized tax benefits will decrease in the next twelve months by $39 million as a result of audit settlements and the expiration of statutes of limitations.
The Company classifies interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Statements of Operations. During the years ended December 31, 2020, 2019 and 2018, the Company recognized $52 million, $19 million and $6 million of interest and penalties, respectively. The Company had $128 million and $76 million of accrued interest and penalties for uncertain tax positions as of December 31, 2020 and 2019, respectively. These amounts are not included in the reconciliation above. As of December 31, 2020, there were $1.0 billion of unrecognized tax benefits which, if recognized, would affect the effective tax rate.
The Company currently files income tax returns in the United States, various states and localities and non-U.S. jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the consolidated income tax returns for fiscal years 2016 and prior. The Company’s 2017 through 2020 tax years are under review by the IRS under its Compliance Assurance Program. With the exception of a few states, the Company is no longer subject to income tax examinations prior to the 2013 tax year. In general, the Company is subject to examination in non-U.S. jurisdictions for years 2015 and forward.