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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Components of income tax expense | The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows:
(Millions) |  | 2022 |  | 2021 |  | 2020
Current income tax expense: |  |  |  |  |  |
U.S. federal |  | $ | 2,445 |  |  | $ | 1,656 |  |  | $ | 1,122 |
U.S. state and local |  | 339 |  |  | 351 |  |  | 339 |
Non-U.S. |  | 476 |  |  | 328 |  |  | 639 |
Total current income tax expense |  | 3,260 |  |  | 2,335 |  |  | 2,100 |
Deferred income tax (benefit) expense: |  |  |  |  |  |
U.S. federal |  | (763) |  |  | 231 |  |  | (931) |
U.S. state and local |  | (117) |  |  | 22 |  |  | (119) |
Non-U.S. |  | (309) |  |  | 41 |  |  | 111 |
Total deferred income tax (benefit) expense |  | (1,189) |  |  | 294 |  |  | (939) |
Total income tax expense |  | $ | 2,071 |  |  | $ | 2,629 |  |  | $ | 1,161 |
Effective income tax rate | A reconciliation of the U.S. federal statutory rate of 21 percent as of December 31, 2022, 2021 and 2020, to our actual income tax rate was as follows:
|  | 2022 |  | 2021 |  | 2020
U.S. statutory federal income tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
(Decrease) increase in taxes resulting from: |  |  |  |  |  |
Tax credits and tax-exempt income (a) |  | (0.9) |  |  | (0.1) |  |  | (4.1) |
State and local income taxes, net of federal benefit |  | 3.1 |  |  | 3.0 |  |  | 3.7 |
Non-U.S. subsidiaries' earnings |  | (0.1) |  |  | 1.1 |  |  | 2.4 |
Tax settlements and lapse of statute of limitations |  | (2.1) |  |  | (0.3) |  |  | (1.6) |
Valuation allowances |  | (0.1) |  |  | — |  |  | 4.0 |
Other |  | 0.7 |  |  | (0.1) |  |  | 1.6 |
Actual tax rates |  | 21.6 | % |  | 24.6 | % |  | 27.0 | %
(a)Includes the implementation of PAM related to investments in QAH projects for the year ended December 31, 2021.
Components of deferred tax assets and liabilities | The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table:
(Millions) |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Reserves not yet deducted for tax purposes |  | $ | 4,052 |  |  | $ | 3,637 |
Employee compensation and benefits |  | 353 |  |  | 359 |
Net operating loss and tax credit carryforwards |  | 411 |  |  | 398 |
Other |  | 776 |  |  | 809 |
Gross deferred tax assets |  | 5,592 |  |  | 5,203 |
Valuation allowance |  | (537) |  |  | (472) |
Deferred tax assets after valuation allowance |  | 5,055 |  |  | 4,731 |
Deferred tax liabilities: |  |  |  |
Intangibles and fixed assets |  | 671 |  |  | 1,320 |
Deferred revenue |  | 126 |  |  | 189 |
Deferred interest |  | 118 |  |  | 133 |
Investment in joint ventures |  | 17 |  |  | 183 |
Other |  | 618 |  |  | 521 |
Gross deferred tax liabilities |  | 1,550 |  |  | 2,346 |
Net deferred tax assets |  | $ | 3,505 |  |  | $ | 2,385 |
Changes in unrecognized tax benefits | The following table presents changes in unrecognized tax benefits:
(Millions) |  | 2022 |  | 2021 |  | 2020
Balance, January 1 |  | $ | 1,024 |  |  | $ | 790 |  |  | $ | 726 |
Increases: |  |  |  |  |  |
Current year tax positions |  | 119 |  |  | 64 |  |  | 57 |
Tax positions related to prior years |  | 30 |  |  | 225 |  |  | 105 |
Effects of foreign currency translations |  | — |  |  | — |  |  | — |
Decreases: |  |  |  |  |  |
Tax positions related to prior years |  | (30) |  |  | (14) |  |  | (24) |
Settlements with tax authorities |  | (74) |  |  | (15) |  |  | (15) |
Lapse of statute of limitations |  | (104) |  |  | (17) |  |  | (58) |
Effects of foreign currency translations |  | (3) |  |  | (9) |  |  | (1) |
Balance, December 31 |  | $ | 962 |  |  | $ | 1,024 |  |  | $ | 790 |

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