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Income Taxes | 12 Months Ended
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Sep. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Pretax earnings consist of the following:
| 2019 |  |  | 2020 |  |  | 2021 |
United States | $ | 1,771 |  |  | 1,360 |  |  | 1,491 |
Non-U.S. | 1,088 |  |  | 975 |  |  | 1,421 |
Total pretax earnings | $ | 2,859 |  |  | 2,335 |  |  | 2,912 |
The principal components of income tax expense follow:
| 2019 |  |  | 2020 |  |  | 2021 |
Current: |  |  |  |  |
U.S. federal | $ | 247 |  |  | 123 |  |  | 152 |
State and local | 24 |  |  | 15 |  |  | 26 |
Non-U.S. | 308 |  |  | 288 |  |  | 355 |
Deferred: |  |  |  |  |
U.S. federal | (2) |  |  | (44) |  |  | 81 |
State and local | 12 |  |  | 1 |  |  | (2) |
Non-U.S. | (58) |  |  | (38) |  |  | (27) |
Income tax expense | $ | 531 |  |  | 345 |  |  | 585 |
Reconciliations of the U.S. federal statutory income tax rate to the Company's effective tax rate follow.
| 2019 |  |  | 2020 |  |  | 2021 |
U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local taxes, net of U.S. federal tax benefit | 1.0 |  |  | 0.6 |  |  | 0.7 |
Non-U.S. rate differential | 1.8 |  |  | 1.7 |  |  | 2.0 |
Non-U.S. tax holidays | (1.1) |  |  | (1.1) |  |  | (0.8) |
Research and development credits | (0.3) |  |  | (1.8) |  |  | (0.6) |
Foreign derived intangible income | (1.1) |  |  | (1.2) |  |  | (1.4) |
Subsidiary restructuring | (2.6) |  |  | (4.4) |  |  | (0.5) |
Other | (0.1) |  |  | — |  |  | (0.3) |
Effective income tax rate | 18.6 | % |  | 14.8 | % |  | 20.1 | %
The tax rates for 2021, 2020 and 2019 include benefits from restructuring subsidiaries of $13, $103 and $74, respectively. The increase in research and development credits in 2020 was due to the impact of a research and development tax credit study. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, half of which is due in December 2021 with the remainder due in December 2022. Non-U.S. tax holidays reduce tax rates in certain jurisdictions and are expected to expire over the next year. Following are changes in unrecognized tax benefits before considering recoverability of any cross-jurisdictional tax credits (U.S. federal, state and non-U.S.) and temporary differences. The amount of unrecognized tax benefits is expected to be reduced by approximately $50 in the next 12 months.
| 2020 |  |  | 2021 |
Unrecognized tax benefits, beginning | $ | 159 |  |  | 195 |
Additions for current year tax positions | 25 |  |  | 27 |
Additions for prior year tax positions | 29 |  |  | 17 |
Reductions for prior year tax positions | (8) |  |  | (6) |
Acquisitions and divestitures | — |  |  | 1 |
Reductions for settlements with tax authorities | — |  |  | (5) |
Reductions for expiration of statutes of limitations | (10) |  |  | (10) |
Unrecognized tax benefits, ending | $ | 195 |  |  | 219 |
If none of the unrecognized tax benefits shown is ultimately paid, the tax provision and the calculation of the effective tax rate would be favorably impacted by $185, which is net of cross-jurisdictional tax credits and temporary differences. The Company accrues interest and penalties related to income taxes in income tax expense. Total expense (income) recognized from interest and penalties was $(4), $1 and $4 in 2021, 2020 and 2019, respectively. As of September 30, 2021 and 2020, total accrued interest and penalties were $24 and $29, respectively. The U.S. is the major jurisdiction for which the Company files income tax returns. U.S. federal tax returns are closed by statute for years through 2013. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates. The principal items that gave rise to deferred income tax assets and liabilities follow:
| 2020 |  |  | 2021 |
Deferred tax assets: |  |  |
Net operating losses, capital losses and tax credits | $ | 487 |  |  | 316 |
Accrued liabilities | 219 |  |  | 216 |
Postretirement and postemployment benefits | 33 |  |  | 29 |
Employee compensation and benefits | 119 |  |  | 149 |
Pensions | 69 |  |  | — |
Other | 137 |  |  | 128 |
Total | $ | 1,064 |  |  | 838 |
Valuation allowances | $ | (293) |  |  | (236) |
Deferred tax liabilities: |  |  |
Intangibles | $ | (652) |  |  | (787) |
Pensions | — |  |  | (107) |
Property, plant and equipment | (212) |  |  | (212) |
Undistributed non-U.S. earnings | (36) |  |  | (38) |
Other | (33) |  |  | (54) |
Total | $ | (933) |  |  | (1,198) |
Net deferred income tax liability | $ | (162) |  |  | (596) |
Total income taxes paid were approximately $680, $400 and $650 in 2021, 2020 and 2019, respectively. Approximately half of the $316 of net operating losses and tax credits expire over the next 10 years, while most of the remainder can be carried forward indefinitely.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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