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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
U.S. income | $ | 4,433 |  |  | $ | 8,399 |  |  | $ | 9,989 |
Non-U.S. income (loss) | 1,953 |  |  | 1,332 |  |  | (263 | )
Income before income taxes and equity income | $ | 6,386 |  |  | $ | 9,731 |  |  | $ | 9,726 |
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Current income tax expense (benefit) |  |  |  |  |
U.S. federal | $ | (104 | ) |  | $ | 18 |  |  | $ | (126 | )
U.S. state and local | 113 |  |  | 83 |  |  | 65 |
Non-U.S. | 577 |  |  | 552 |  |  | 572 |
Total current income tax expense | 586 |  |  | 653 |  |  | 511 |
Deferred income tax expense (benefit) |  |  |  |  |  |  |  |
U.S. federal | (578 | ) |  | 7,831 |  |  | 1,865 |
U.S. state and local | 250 |  |  | (187 | ) |  | 264 |
Non-U.S. | 216 |  |  | 3,236 |  |  | 99 |
Total deferred income tax expense (benefit) | (112 | ) |  | 10,880 |  |  | 2,228 |
Total income tax expense | $ | 474 |  |  | $ | 11,533 |  |  | $ | 2,739 |
Provisions are made for estimated U.S. and non-U.S. income taxes which may be incurred on the reversal of our basis differences in investments in foreign subsidiaries and corporate joint ventures not deemed to be indefinitely reinvested. Taxes have not been provided on basis differences in investments primarily as a result of earnings in foreign subsidiaries which are deemed indefinitely reinvested of $2.9 billion and $2.8 billion at December 31, 2018 and 2017. Additional basis differences related to investments in nonconsolidated China JVs exist of $4.1 billion at December 31, 2018 and 2017 as a result of fresh-start reporting. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Income tax expense at U.S. federal statutory income tax rate | $ | 1,341 |  |  | $ | 3,406 |  |  | $ | 3,404 |
State and local tax expense | 282 |  |  | (76 | ) |  | 190 |
Non-U.S. income taxed at other than the U.S. federal statutory tax rate | 90 |  |  | (145 | ) |  | (61 | )
U.S. tax impact on Non-U.S. income | (822 | ) |  | (941 | ) |  | (894 | )
Change in valuation allowances | 1,695 |  |  | 2,712 |  |  | 237 |
Change in tax laws | (134 | ) |  | 7,194 |  |  | 147 |
General business credits and manufacturing incentives | (695 | ) |  | (428 | ) |  | (342 | )
Capital loss expiration | 107 |  |  | — |  |  | — |
Settlements of prior year tax matters | (188 | ) |  | (256 | ) |  | (46 | )
Realization of basis differences in affiliates | (59 | ) |  | — |  |  | (94 | )
German statutory approval of net operating losses | (990 | ) |  | — |  |  | — |
Other adjustments | (153 | ) |  | 67 |  |  | 198 |
Total income tax expense | $ | 474 |  |  | $ | 11,533 |  |  | $ | 2,739 |
Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2018 and 2017 reflect the effect of temporary differences between amounts of assets, liabilities and equity for financial reporting purposes and the bases of such assets, liabilities and equity as measured based on tax laws, as well as tax loss and tax credit carryforwards. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities:
| December 31, 2018 |  | December 31, 2017
Deferred tax assets |  |  |
Postretirement benefits other than pensions | $ | 1,584 |  |  | $ | 1,948 |
Pension and other employee benefit plans | 3,020 |  |  | 3,285 |
Warranties, dealer and customer allowances, claims and discounts | 6,307 |  |  | 5,675 |
U.S. capitalized research expenditures | 5,176 |  |  | 4,413 |
U.S. operating loss and tax credit carryforwards(a) | 8,591 |  |  | 8,578 |
Non-U.S. operating loss and tax credit carryforwards(b) | 6,393 |  |  | 5,103 |
Miscellaneous | 2,034 |  |  | 1,697 |
Total deferred tax assets before valuation allowances | 33,105 |  |  | 30,699 |
Less: valuation allowances | (7,976 | ) |  | (6,690 | )
Total deferred tax assets | 25,129 |  |  | 24,009 |
Deferred tax liabilities |  |  |  |  |
Property, plant and equipment | 1,098 |  |  | 418 |
Intangible assets | 729 |  |  | 735 |
Total deferred tax liabilities | 1,827 |  |  | 1,153 |
Net deferred tax assets | $ | 23,302 |  |  | $ | 22,856 |
_________
(a) | At December 31, 2018 U.S. operating loss and tax credit carryforwards of $8.6 billion expire through 2038 if not utilized.
(b) | At December 31, 2018 Non-U.S. operating loss and tax credit carryforwards of $1.2 billion expire through 2037 if not utilized and the remaining balance of $5.2 billion may be carried forward indefinitely.
Valuation Allowances We have $3.3 billion of net operating loss carryforwards in Germany that, as a result of reorganizations that took place in 2008 and 2009 and then existing German Law, were not previously recorded as deferred tax assets. In the three months ended December 31, 2018 a favorable European court decision was statutorily approved in Germany enabling use of those loss carryforwards. As a result, in the three months ended December 31, 2018 deferred tax assets totaling $1.0 billion were established for the loss carryfowards; offsetting valuation allowances were also established as the deferred tax assets are not more likely than not to be realized. During the year ended December 31, 2018 valuation allowances against deferred tax assets of $8.0 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain and South Korea. During the year ended December 31, 2017 there was a $2.3 billion increase in the valuation allowance related to deferred tax assets that are no longer realizable as a result of the sale of the Opel/Vauxhall Business as described in Note 22. At December 31, 2017 valuation allowances against deferred tax assets of $6.7 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain and South Korea. Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Balance at beginning of period | $ | 1,557 |  |  | $ | 1,182 |  |  | $ | 1,337 |
Additions to current year tax positions | 292 |  |  | 160 |  |  | 49 |
Additions to prior years' tax positions | 264 |  |  | 448 |  |  | 96 |
Reductions to prior years' tax positions | (244 | ) |  | (195 | ) |  | (192 | )
Reductions in tax positions due to lapse of statutory limitations | (38 | ) |  | (44 | ) |  | (103 | )
Settlements | (450 | ) |  | (11 | ) |  | (1 | )
Other | (40 | ) |  | 17 |  |  | (4 | )
Balance at end of period | $ | 1,341 |  |  | $ | 1,557 |  |  | $ | 1,182 |
At December 31, 2018 and 2017 there were $991 million and $390 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2018, 2017 and 2016 income tax related interest and penalties were insignificant. At December 31, 2018 and 2017 we had liabilities of $116 million and $152 million for income tax related interest and penalties. At December 31, 2018 it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits in the next twelve months. Other Matters Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We have open tax years from 2008 to 2018 with various significant tax jurisdictions. Tax authorities may have the ability to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The Tax Act was signed into law on December 22, 2017. The Tax Act changed many aspects of U.S. corporate income taxation and included reduction of the corporate income tax rate from 35% to 21%, implementation of a territorial tax system and imposition of a tax on deemed repatriated earnings of foreign subsidiaries. We recognized the tax effects of the Tax Act in the year ended December 31, 2017 and recorded $7.3 billion in tax expense. The tax expense relates primarily to the remeasurement of deferred tax assets to the 21% tax rate. We applied the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Act in 2017 and throughout 2018. At December 31, 2018, we have now completed our accounting for all the enactment-date income tax effects of the Tax Act. We reduced our year ended December 31, 2017 estimated tax expense of $7.3 billion to $7.1 billion, primarily related to the remeasurement of deferred tax assets to the 21% tax rate. The Tax Act subjects a U.S. shareholder to tax on Global Intangible Low Tax Income (GILTI) earned by certain foreign subsidiaries. The FASB Staff Q&A Topic 740, No. 5 "Accounting for Global Intangible Low-Taxed Income," states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. We have elected to account for GILTI as a current period expense when incurred.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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