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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Tax Expense Benefit | The income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consists of the following (in millions):
| 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |
U.S. Federal | $ | 1,388 |  |  | $ | 839 |  |  | $ | 570 |
U.S. State and Local | 194 |  |  | 100 |  |  | 183 |
Non-U.S. | 478 |  |  | 420 |  |  | 359 |
Total Current | 2,060 |  |  | 1,359 |  |  | 1,112 |
Deferred: |  |  |  |  |
U.S. Federal | 1,311 |  |  | (725) |  |  | 255 |
U.S. State and Local | 273 |  |  | (159) |  |  | (93) |
Non-U.S. | 61 |  |  | 26 |  |  | (62) |
Total Deferred | 1,645 |  |  | (858) |  |  | 100 |
Total Income Tax Expense | $ | 3,705 |  |  | $ | 501 |  |  | $ | 1,212 |
Income Before Income Taxes | Income before income taxes includes the following components (in millions):
| 2021 |  | 2020 |  | 2019
United States | $ | 14,220 |  |  | $ | (39) |  |  | $ | 3,972 |
Non-U.S. | 2,375 |  |  | 1,883 |  |  | 1,680 |
Total Income Before Income Taxes: | $ | 16,595 |  |  | $ | 1,844 |  |  | $ | 5,652 |
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2021, 2020 and 2019 consists of the following:
| 2021 |  | 2020 |  | 2019
Statutory U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. state and local income taxes (net of federal benefit) (1) | 2.2 |  |  | (2.6) |  |  | 1.4 |
Non-U.S. tax rate differential | — |  |  | 1.6 |  |  | 0.3 |
U.S. federal tax credits | (0.4) |  |  | (3.6) |  |  | (1.4) |
Goodwill and other asset impairments | — |  |  | 5.1 |  |  | — |
Net uncertain tax positions | 0.6 |  |  | 3.6 |  |  | 0.1 |
Non-U.S. valuation allowance release | — |  |  | — |  |  | (1.2) |
Other | (1.1) |  |  | 2.1 |  |  | 1.2 |
Effective income tax rate | 22.3 | % |  | 27.2 | % |  | 21.4 | %
Deferred Tax Liabilities and Assets | Deferred income tax assets and liabilities are comprised of the following as of December 31, 2021 and 2020 (in millions):
| 2021 |  | 2020
Fixed assets and capitalized software | $ | (5,808) |  |  | $ | (5,355) |
Operating lease right-of-use assets | (839) |  |  | (730) |
Other | (593) |  |  | (501) |
Deferred tax liabilities | (7,240) |  |  | (6,586) |
Pension and postretirement benefits | 1,620 |  |  | 3,994 |
Loss and credit carryforwards | 342 |  |  | 325 |
Insurance reserves | 587 |  |  | 535 |
Stock compensation | 219 |  |  | 183 |
Accrued employee compensation | 453 |  |  | 583 |
Operating lease liabilities | 874 |  |  | 736 |
Other | 318 |  |  | 357 |
Deferred tax assets | 4,413 |  |  | 6,713 |
Deferred tax assets valuation allowance | (122) |  |  | (88) |
Deferred tax asset (net of valuation allowance) | 4,291 |  |  | 6,625 |
Net deferred tax asset (liability) | $ | (2,949) |  |  | $ | 39 |
Amounts recognized in the consolidated balance sheets: |  |  |
Deferred tax assets | $ | 176 |  |  | $ | 527 |
Deferred tax liabilities | (3,125) |  |  | (488) |
Net deferred tax asset (liability) | $ | (2,949) |  |  | $ | 39 |
U.S. State and Local Operating Loss and Credit Carryforwards | Further, we have U.S. state and local operating loss and credit carryforwards as follows (in millions):
| 2021 |  | 2020
U.S. state and local operating loss carryforwards | $ | 924 |  |  | $ | 1,253 |
U.S. state and local credit carryforwards | $ | 90 |  |  | $ | 108 |
Summarized Activity Related to Unrecognized Tax Benefits | The following table summarizes the activity related to our uncertain tax positions (in millions):
| Tax |  | Interest |  | Penalties
Balance as of January 1, 2019 | $ | 167 |  |  | $ | 44 |  |  | $ | 5 |
Additions for tax positions of the current year | 6 |  |  | — |  |  | — |
Additions for tax positions of prior years | 51 |  |  | 13 |  |  | — |
Reductions for tax positions of prior years for: |  |  |  |  |
Changes based on facts and circumstances | (45) |  |  | (4) |  |  | (1) |
Settlements during the period | (3) |  |  | (1) |  |  | — |
Lapses of applicable statute of limitations | (4) |  |  | — |  |  | — |
Balance as of December 31, 2019 | 172 |  |  | 52 |  |  | 4 |
Additions for tax positions of the current year | 61 |  |  | — |  |  | — |
Additions for tax positions of prior years | 154 |  |  | 34 |  |  | 2 |
Reductions for tax positions of prior years for: |  |  |  |  |
Changes based on facts and circumstances | (54) |  |  | (24) |  |  | (2) |
Settlements during the period | — |  |  | (1) |  |  | — |
Lapses of applicable statute of limitations | — |  |  | — |  |  | — |
Balance as of December 31, 2020 | 333 |  |  | 61 |  |  | 4 |
Additions for tax positions of the current year | 85 |  |  | — |  |  | — |
Additions for tax positions of prior years | 107 |  |  | 23 |  |  | — |
Reductions for tax positions of prior years for: |  |  |  |  |
Changes based on facts and circumstances | (42) |  |  | (4) |  |  | (2) |
Settlements during the period | (3) |  |  | (2) |  |  | — |
Lapses of applicable statute of limitations | — |  |  | — |  |  | — |
Balance as of December 31, 2021 | $ | 480 |  |  | $ | 78 |  |  | $ | 2 |

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