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Income Taxes | 12 Months Ended
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Dec. 31, 2024
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,
2024 |  | 2023 |  | 2022
(in millions)
Current income tax |  |  |  |  |
Federal | $ | 583 |  |  | $ | 518 |  |  | $ | 509 |
State and local | 137 |  |  | 124 |  |  | 93 |
Foreign | 21 |  |  | 18 |  |  | 25 |
Total current income tax | 741 |  |  | 660 |  |  | 627 |
Deferred income tax |  |  |  |  |
Federal | 164 |  |  | 45 |  |  | 155 |
State and local | (29) |  |  | (14) |  |  | 6 |
Foreign | (10) |  |  | (13) |  |  | (6) |
Total deferred income tax | 125 |  |  | 18 |  |  | 155 |
Total income tax provision | $ | 866 |  |  | $ | 678 |  |  | $ | 782 |
The geographic sources of pretax income from continuing operations were as follows:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
| (in millions)
United States | $ | 4,221 |  |  | $ | 3,199 |  |  | $ | 3,824 |
Foreign | 46 |  |  | 35 |  |  | 107 |
Total | $ | 4,267 |  |  | $ | 3,234 |  |  | $ | 3,931 |
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,
2024 |  | 2023 |  | 2022
Tax at U.S. statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Changes in taxes resulting from: |  |  |  |  |
State taxes, net of federal benefit | 2.0 |  |  | 2.7 |  |  | 2.0 |
Incentive compensation | (1.6) |  |  | (1.5) |  |  | (1.0) |
Low income housing tax credits | (0.6) |  |  | (1.0) |  |  | (1.1) |
Non-deductible expenses | 0.5 |  |  | 1.1 |  |  | 0.5 |
Other, net | (1.0) |  |  | (1.3) |  |  | (1.5) |
Income tax provision | 20.3 | % |  | 21.0 | % |  | 19.9 | %
The decrease in the Company’s effective tax rate for the year ended December 31, 2024 compared to 2023 does not contain any significant changes in effective tax rate reconciling items. The increase in the Company’s effective tax rate for the year ended December 31, 2023 compared to 2022 is primarily the result of an increase in state taxes, net of federal benefit, partially offset by incentive compensation and 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, 2024 and 2023. 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,
2024 |  | 2023
(in millions)
Deferred income tax assets
Insurance and annuity benefits including corresponding hedges | $ | 802 |  |  | $ | 1,244 |
Deferred compensation including corresponding hedges | 655 |  |  | 545 |
Investments including net unrealized on Available-for-Sale securities | 381 |  |  | 335 |
Net operating loss and tax credit carryforward | 221 |  |  | 74 |
Other | 159 |  |  | 127 |
Gross deferred income tax assets | 2,218 |  |  | 2,325 |
Less: valuation allowance | 67 |  |  | 65 |
Total deferred income tax assets | 2,151 |  |  | 2,260 |
Deferred income tax liabilities |  |  |
Deferred acquisition costs | 364 |  |  | 390 |
Goodwill and intangibles | 323 |  |  | 313 |
Other | 137 |  |  | 131 |
Gross deferred income tax liabilities | 824 |  |  | 834 |
Net deferred income tax assets | $ | 1,327 |  |  | $ | 1,426 |
Included in the Company’s deferred income tax assets are tax benefits related to foreign net operating losses of $52 million, which do not expire, CAMT credit carryforwards of $131 million, which do not expire, and state net operating losses of $38 million, net of federal benefit, which will expire beginning December 31, 2025. Based on analysis of the Company’s tax position as of December 31, 2024, management believes it is more likely than not that the Company will not realize certain state net operating losses of $32 million, state deferred tax assets of $2 million (both net of federal benefit), and foreign net operating losses of $33 million; therefore, a valuation allowance of $67 million has been established. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows:
| 2024 |  | 2023 |  | 2022
| (in millions)
Balance at January 1 | $ | 150 |  |  | $ | 138 |  |  | $ | 125 |
Additions for tax positions related to the current year | 22 |  |  | 26 |  |  | 12 |
Reductions for tax positions related to the current year | (2) |  |  | (3) |  |  | (1) |
Additions for tax positions of prior years | 23 |  |  | 80 |  |  | 5 |
Reductions for tax positions of prior years | (8) |  |  | (85) |  |  | (1) |
Reductions due to lapse of statutes of limitations | (20) |  |  | (5) |  |  | — |
Audit settlements | (1) |  |  | (1) |  |  | (2) |
Balance at December 31 | $ | 164 |  |  | $ | 150 |  |  | $ | 138 |
If recognized, approximately $134 million, $120 million and $106 million, net of federal tax benefits, of unrecognized tax benefits as of December 31, 2024, 2023 and 2022, 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 $16 million in the next 12 months primarily due to expected exam closures and state statutes of limitations expirations. 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 $5 million, $12 million and $4 million in interest and penalties for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, the Company had a payable of $31 million and $26 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 Internal Revenue Service (“IRS”) is currently auditing the Company’s U.S. income tax returns for 2019 and 2020. The Company’s state income tax returns are currently under examination by various jurisdictions for years ranging from 2017 through 2023. The Company is an applicable corporation required to compute CAMT. As of December 31, 2024 and 2023, the Company recorded an estimate of $131 million and nil, respectively, for the current provision of the CAMT. The provision was offset with a deferred tax asset for the CAMT credit carryover, which does not expire, resulting in no impact to the total tax provision. The estimate is based on interpretations and assumptions of available guidance the Company has made regarding the CAMT provisions of the Inflation Reduction Act of 2022. The U.S. Department of the Treasury issued proposed CAMT regulations in the third quarter of 2024. The proposed regulations are subject to public review and comment prior to finalizing. The Company is evaluating the potential impact of the proposed regulations. In December 2021, the Organization for Economic Co-operation and Development published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises pay a minimum level of tax on profits from each jurisdiction in which they operate. Various jurisdictions that the Company operates in have enacted or substantively enacted legislation that became effective beginning January 1, 2024. The Company intends to rely on Pillar Two transitional safe harbors where available and, based on its current estimate, the tax impact is not material to the consolidated financial statements. The Company continues to monitor the adoption and implementation of these rules and evaluate the potential impact on its consolidated financial statements.

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