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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income tax provision attributable to continuing operations were as follows:
| Years Ended December 31,
2022 |  | 2021 |  | 2020
(in millions)
Current income tax |  |  |  |  |
Federal | $ | 509 |  |  | $ | 551 |  |  | $ | 527 |
State and local | 93 |  |  | 79 |  |  | 63 |
Foreign | 25 |  |  | 47 |  |  | 28 |
Total current income tax | 627 |  |  | 677 |  |  | 618 |
Deferred income tax |  |  |  |  |
Federal | (1) |  |  | (62) |  |  | (309) |
State and local | 3 |  |  | (3) |  |  | (16) |
Foreign | (6) |  |  | (22) |  |  | 4 |
Total deferred income tax | (4) |  |  | (87) |  |  | (321) |
Total income tax provision | $ | 623 |  |  | $ | 590 |  |  | $ | 297 |
The geographic sources of pretax income from continuing operations were as follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (in millions)
United States | $ | 3,075 |  |  | $ | 3,126 |  |  | $ | 1,685 |
Foreign | 107 |  |  | 224 |  |  | 146 |
Total | $ | 3,182 |  |  | $ | 3,350 |  |  | $ | 1,831 |
The principal reasons that the aggregate income tax provision attributable to continuing operations is different from that computed by using the U.S. statutory rate of 21% were as follows:
| Years Ended December 31,
2022 |  | 2021 |  | 2020
Tax at U.S. statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Changes in taxes resulting from: |  |  |  |  |
State taxes, net of federal benefit | 2.4 |  |  | 1.8 |  |  | 2.1 |
Low income housing tax credits | (1.4) |  |  | (2.0) |  |  | (4.3) |
Incentive compensation | (1.3) |  |  | (1.6) |  |  | (1.4) |
Dividends received deduction | (1.1) |  |  | (1.0) |  |  | (2.1) |
Other, net | — |  |  | (0.6) |  |  | 0.9 |
Income tax provision | 19.6 | % |  | 17.6 | % |  | 16.2 | %
The increase in the Company’s effective tax rate for the year ended December 31, 2022 compared to 2021 is primarily the result of a decrease in low income housing tax credits and an increase in state taxes, net of federal benefit, and various other adjustments. The increase in the Company’s effective tax rate for the year ended December 31, 2021 compared to 2020 is primarily the result of a decrease in the dividends received deduction and low income housing tax credits, partially offset by various other adjustments. Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for GAAP reporting versus income tax return purposes. Deferred income tax assets and liabilities are measured at the statutory rate of 21% as of both December 31, 2022 and 2021. The significant components of the Company’s deferred income tax assets and liabilities, which are included net within Other assets or Other liabilities, were as follows:
| December 31,
2022 |  | 2021
(in millions)
Deferred income tax assets
Liabilities for policyholder account balances, future policy benefits and claims | $ | 2,397 |  |  | $ | 1,996 |
Net unrealized losses on Available-for-Sale securities | 542 |  |  | — |
Deferred compensation | 477 |  |  | 586 |
Other | 198 |  |  | 179 |
Gross deferred income tax assets | 3,614 |  |  | 2,761 |
Less: valuation allowance | 65 |  |  | 32 |
Total deferred income tax assets | 3,549 |  |  | 2,729 |
Deferred income tax liabilities |  |  |
Investment related | 924 |  |  | 565 |
Deferred acquisition costs | 463 |  |  | 481 |
Intangible assets | 216 |  |  | 209 |
Goodwill | 85 |  |  | 77 |
Net unrealized gains on Available-for-Sale securities(1) | — |  |  | 182 |
Other | 160 |  |  | 196 |
Gross deferred income tax liabilities | 1,848 |  |  | 1,710 |
Net deferred income tax assets | $ | 1,701 |  |  | $ | 1,019 |
(1) See Note 28 for a summary of the revision to the Company’s previously reported Consolidated Financial Statements. Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $30 million, net of federal benefit, which will expire beginning December 31, 2023 and foreign net operating losses of $34 million. Based on analysis of the Company’s tax position as of December 31, 2022, management believes it is more likely than not that the Company will not realize certain state net operating losses of $29 million, state deferred tax assets of $2 million and foreign net operating losses of $34 million; therefore, a valuation allowance of $65 million has been established. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows:
| 2022 |  | 2021 |  | 2020
| (in millions)
Balance at January 1 | $ | 125 |  |  | $ | 110 |  |  | $ | 100 |
Additions based on tax positions related to the current year | 12 |  |  | 21 |  |  | 11 |
Reductions based on tax positions related to the current year | (1) |  |  | (1) |  |  | (1) |
Additions for tax positions of prior years | 5 |  |  | 5 |  |  | 10 |
Reductions for tax positions of prior years | (1) |  |  | (8) |  |  | (4) |
Reductions due to lapse of statute of limitations | — |  |  | (1) |  |  | (5) |
Audit settlements | (2) |  |  | (1) |  |  | (1) |
Balance at December 31 | $ | 138 |  |  | $ | 125 |  |  | $ | 110 |
If recognized, approximately $106 million, $95 million and $80 million, net of federal tax benefits, of unrecognized tax benefits as of December 31, 2022, 2021 and 2020, respectively, would affect the effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by approximately $58 million in the next 12 months primarily due to Internal Revenue Service (“IRS”) settlements and state exams. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized a net increase of $4 million, nil and a net increase of $2 million in interest and penalties for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, the Company had a payable of $14 million and $10 million, respectively, related to accrued interest and penalties. The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The federal statute of limitations are closed on years through 2015, except for one issue for 2014 and 2015 which was claimed on amended returns. The IRS is currently auditing the Company’s U.S. income tax returns for 2016 through 2020. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2015 through 2020.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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