XML 41 R25.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Years Ended December 31,
202120202019
U.S. income$9,513 $6,881 $3,826 
Non-U.S. income1,902 540 2,342 
Income before income taxes and equity income$11,415 $7,421 $6,168 
Years Ended December 31,
202120202019
Current income tax expense
U.S. federal$20 $84 $42 
U.S. state and local142 272 102 
Non-U.S.395 493 758 
Total current income tax expense557 849 902 
Deferred income tax expense (benefit)
U.S. federal1,699 632 (145)
U.S. state and local229 (15)3 
Non-U.S.286 308 9 
Total deferred income tax expense (benefit)2,214 925 (133)
Total income tax expense$2,771 $1,774 $769 

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 at December 31, 2021 and 2020. We have indefinitely reinvested basis differences related to investments in non-consolidated China JVs of $3.4 billion at December 31, 2021 and 2020 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,
202120202019
Income tax expense at U.S. federal statutory income tax rate$2,397 $1,558 $1,295 
State and local tax expense301 219 117 
Non-U.S. income taxed at other than the U.S. federal statutory tax rate36 (1)166 
U.S. tax impact on Non-U.S. income and activities129 (160)(197)
Change in valuation allowances665 370 (233)
Change in tax laws(93)— (122)
General business credits and manufacturing incentives(492)(366)(420)
Settlements of prior year tax matters11 (18)— 
Realization of basis differences in affiliates(295)(12)— 
Foreign currency remeasurement28 (7)74 
Other adjustments84 191 89 
Total income tax expense$2,771 $1,774 $769 
Deferred Income Tax Assets and Liabilities Deferred income tax assets and liabilities at December 31, 2021 and 2020 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, 2021December 31, 2020
Deferred tax assets
Postretirement benefits other than pensions$1,572 $1,742 
Pension and other employee benefit plans1,540 2,999 
Warranties, dealer and customer allowances, claims and discounts4,253 5,538 
U.S. capitalized research expenditures7,285 6,763 
U.S. operating loss and tax credit carryforwards(a)6,959 7,254 
Non-U.S. operating loss and tax credit carryforwards(b)6,593 7,216 
Miscellaneous3,468 3,479 
Total deferred tax assets before valuation allowances31,670 34,991 
Less: valuation allowances(8,855)(9,095)
Total deferred tax assets22,815 25,896 
Deferred tax liabilities
Property, plant and equipment1,775 1,670 
Intangible assets729 744 
Total deferred tax liabilities2,504 2,414 
Net deferred tax assets$20,311 $23,482 
_________
(a)    At December 31, 2021, U.S. operating loss and tax credit carryforwards of $6.5 billion expire by 2041 if not utilized and the remaining balance of $450 million may be carried forward indefinitely.
(b)    At December 31, 2021, Non-U.S. operating loss and tax credit carryforwards of $1.2 billion expire by 2041 if not utilized and the remaining balance of $5.4 billion may be carried forward indefinitely.

Valuation Allowances During the years ended December 31, 2021 and 2020, valuation allowances against deferred tax assets of $8.9 billion and $9.1 billion were comprised of cumulative losses, credits and other timing differences, primarily in Germany, Spain, South Korea and the U.S.

Uncertain Tax Positions The following table summarizes activity of the total amounts of unrecognized tax benefits:
Years Ended December 31,
202120202019
Balance at beginning of period$1,086 $775 $1,341 
Additions to current year tax positions22 435 18 
Additions to prior years' tax positions46 26 13 
Reductions to prior years' tax positions(473)(132)(501)
Reductions in tax positions due to lapse of statutory limitations(17)(3)(8)
Settlements(26)(10)(93)
Other(4)(5)5 
Balance at end of period$634 $1,086 $775 

At December 31, 2021 and 2020 there were $411 million and $851 million of unrecognized tax benefits that if recognized would favorably affect our effective tax rate in the future. In the years ended December 31, 2021, 2020 and 2019 income tax related interest and penalties were insignificant. At December 31, 2021 and 2020 we had liabilities of $86 million and $92 million for income tax related interest and penalties.
At December 31, 2021 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 2011 to 2021 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.