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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
U.S. income | $ | 3,826 |  |  | $ | 4,433 |  |  | $ | 8,399 |
Non-U.S. income | 2,342 |  |  | 1,953 |  |  | 1,332 |
Income before income taxes and equity income | $ | 6,168 |  |  | $ | 6,386 |  |  | $ | 9,731 |
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
Current income tax expense (benefit) |  |  |  |  |
U.S. federal | $ | 42 |  |  | $ | (104 | ) |  | $ | 18 |
U.S. state and local | 102 |  |  | 113 |  |  | 83 |
Non-U.S. | 758 |  |  | 577 |  |  | 552 |
Total current income tax expense | 902 |  |  | 586 |  |  | 653 |
Deferred income tax expense (benefit) |  |  |  |  |  |  |  |
U.S. federal | (145 | ) |  | (578 | ) |  | 7,831 |
U.S. state and local | 3 |  |  | 250 |  |  | (187 | )
Non-U.S. | 9 |  |  | 216 |  |  | 3,236 |
Total deferred income tax expense (benefit) | (133 | ) |  | (112 | ) |  | 10,880 |
Total income tax expense | $ | 769 |  |  | $ | 474 |  |  | $ | 11,533 |
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 $3.2 billion and $2.9 billion at December 31, 2019 and 2018. Additional basis differences related to investments in nonconsolidated China JVs exist of $4.1 billion at December 31, 2019 and 2018 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,
| 2019 |  | 2018 |  | 2017
Income tax expense at U.S. federal statutory income tax rate | $ | 1,295 |  |  | $ | 1,341 |  |  | $ | 3,406 |
State and local tax expense (benefit) | 117 |  |  | 282 |  |  | (76 | )
Non-U.S. income taxed at other than the U.S. federal statutory tax rate | 166 |  |  | 90 |  |  | (145 | )
U.S. tax impact on Non-U.S. income and activities | (197 | ) |  | (822 | ) |  | (941 | )
Change in valuation allowances | (233 | ) |  | 1,695 |  |  | 2,712 |
Change in tax laws | (122 | ) |  | (134 | ) |  | 7,194 |
General business credits and manufacturing incentives | (420 | ) |  | (695 | ) |  | (428 | )
Capital loss expiration | — |  |  | 107 |  |  | — |
Settlements of prior year tax matters | — |  |  | (188 | ) |  | (256 | )
Realization of basis differences in affiliates | — |  |  | (59 | ) |  | — |
German statutory approval of net operating losses | — |  |  | (990 | ) |  | — |
Foreign currency remeasurement | 74 |  |  | 19 |  |  | 23 |
Other adjustments | 89 |  |  | (172 | ) |  | 44 |
Total income tax expense | $ | 769 |  |  | $ | 474 |  |  | $ | 11,533 |
Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2019 and 2018 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, 2019 |  | December 31, 2018
Deferred tax assets |  |  |
Postretirement benefits other than pensions | $ | 1,695 |  |  | $ | 1,584 |
Pension and other employee benefit plans | 2,968 |  |  | 3,020 |
Warranties, dealer and customer allowances, claims and discounts | 6,299 |  |  | 6,307 |
U.S. capitalized research expenditures | 6,035 |  |  | 5,176 |
U.S. operating loss and tax credit carryforwards(a) | 8,686 |  |  | 8,591 |
Non-U.S. operating loss and tax credit carryforwards(b) | 6,731 |  |  | 6,393 |
Miscellaneous | 1,965 |  |  | 2,034 |
Total deferred tax assets before valuation allowances | 34,379 |  |  | 33,105 |
Less: valuation allowances | (8,135 | ) |  | (7,976 | )
Total deferred tax assets | 26,244 |  |  | 25,129 |
Deferred tax liabilities |  |  |  |  |
Property, plant and equipment | 1,565 |  |  | 1,098 |
Intangible assets | 763 |  |  | 729 |
Total deferred tax liabilities | 2,328 |  |  | 1,827 |
Net deferred tax assets | $ | 23,916 |  |  | $ | 23,302 |
_________
(a) | At December 31, 2019 U.S. operating loss and tax credit carryforwards of $8.7 billion expire by 2039 if not utilized.
(b) | At December 31, 2019 Non-U.S. operating loss and tax credit carryforwards of $1.3 billion expire by 2039 if not utilized and the remaining balance of $5.4 billion may be carried forward indefinitely.
Valuation Allowances During the years ended December 31, 2019 and 2018, valuation allowances against deferred tax assets of $8.1 billion and $8.0 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain and South Korea. 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 2018 a favorable European court decision was statutorily approved in Germany enabling use of those loss carryforwards, and deferred tax assets totaling $1.0 billion were established for the loss carryforwards. Offsetting valuation allowances were also established as the deferred tax assets are not more likely than not to be realized. Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
| Years Ended December 31,
| 2019 |  | 2018 |  | 2017
Balance at beginning of period | $ | 1,341 |  |  | $ | 1,557 |  |  | $ | 1,182 |
Additions to current year tax positions | 18 |  |  | 292 |  |  | 160 |
Additions to prior years' tax positions | 13 |  |  | 264 |  |  | 448 |
Reductions to prior years' tax positions | (501 | ) |  | (244 | ) |  | (195 | )
Reductions in tax positions due to lapse of statutory limitations | (8 | ) |  | (38 | ) |  | (44 | )
Settlements | (93 | ) |  | (450 | ) |  | (11 | )
Other | 5 |  |  | (40 | ) |  | 17 |
Balance at end of period | $ | 775 |  |  | $ | 1,341 |  |  | $ | 1,557 |
At December 31, 2019 and 2018 there were $539 million and $991 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2019, 2018 and 2017 income tax related interest and penalties were insignificant. At December 31, 2019 and 2018 we had liabilities of $117 million and $116 million for income tax related interest and penalties. At December 31, 2019 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 2009 to 2019 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 U.S. Tax Cuts and Jobs Act of 2017 (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 primarily relates 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 2018. During the year ended December 31, 2018 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.

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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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