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Income Taxes | 6 Months Ended
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Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes Our effective tax rate was 23.9% and 1.0% in the quarters ended June 30, 2021 and 2020, respectively. Tax expense in the quarter ended June 30, 2021 includes tax charges of $73 million associated with the revaluation of deferred taxes resulting from the increase in the United Kingdom (U.K.) corporate tax rate to 25% effective in 2023. The loss from continuing operations before income taxes for the quarter ended June 30, 2020 includes the $3.2 billion goodwill impairment as described in “Note 2: Acquisitions, Dispositions, Goodwill and Intangible Assets,” most of which is non-deductible for tax purposes. Tax expense in the quarter ended June 30, 2020 includes tax charges of $60 million related to the June 2020 debt exchange, and tax charges of $46 million associated with a revaluation of certain international tax incentives. Our effective tax rate was 26.5% and (22.0)% in the six months ended June 30, 2021 and 2020, respectively. Tax expense in the six months ended June 30, 2021 includes tax charges of $148 million associated with the sale of the Forcepoint business and the tax charges of $73 million associated with the enactment of the U.K. corporate tax rate change discussed above. The loss from continuing operations before income taxes for the six months ended June 30, 2020 includes the $3.2 billion goodwill impairment as described in “Note 2: Acquisitions, Dispositions, Goodwill and Intangible Assets,” most of which is non-deductible for tax purposes. Tax expense in the six months ended June 30, 2020 includes tax charges of $415 million resulting from the Separation Transactions or the Raytheon Merger, primarily related to the impairment of deferred tax assets, tax charges of $60 million related to the June 2020 debt exchange, and tax charges of $46 million associated with a revaluation of certain international tax incentives. We conduct business globally and, as a result, Raytheon Technologies or one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Canada, China, France, Germany, India, Poland, Saudi Arabia, Singapore, Switzerland, the United Kingdom and the United States. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2012. In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. It is reasonably possible that a net reduction within the range of $35 million to $410 million of unrecognized tax benefits may occur within the next 12 months as a result of the revaluation of uncertain tax positions arising from the issuance of legislation, regulatory or other guidance or developments in examinations, in appeals, or in the courts, or the closure of tax statutes. Interest recognized during the quarters ended June 30, 2021 and 2020 was $10 million and $11 million, respectively. Interest recognized during the six months ended June 30, 2021 and 2020 was $19 million and $22 million, respectively. Accrued interest on unrecognized tax benefits was $154 million and $141 million, at June 30, 2021 and December 31, 2020, respectively. Management has determined that the distributions of Carrier and Otis on April 3, 2020, and certain related internal business separation transactions, qualified as tax-free under applicable law. In making these determinations, we applied the tax law in the relevant jurisdictions to our facts and circumstances and obtained tax rulings from the relevant taxing authorities, tax opinions, and/or other external tax advice related to the concluded tax treatment. If the completed distributions of Carrier or Otis, in each case, or certain internal business separation transactions, were to fail to qualify for tax-free treatment, the Company could be subject to significant liabilities, and there could be material adverse impacts on the Company’s business, financial condition, results of operations and cash flows in future reporting periods. The Examination Division of the Internal Revenue Service (IRS) is currently auditing Raytheon Technologies tax years 2017 and 2018 and pre-merger Raytheon Company tax periods 2017, 2018 and 2019 as well as certain refund claims of Raytheon Company for tax years 2014, 2015 and 2016 filed prior to the Raytheon Merger. The Examination Division of the IRS is also auditing pre-acquisition Rockwell Collins fiscal tax years 2016 and 2017, which is projected to close in the next six to nine months. As a result of the projected closure of the audit of Rockwell Collins fiscal tax years 2016 and 2017, it is reasonably possible that the Company may recognize non-cash gains in the range of $20 million to $100 million in the next six to nine months.

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