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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings | The following is a reconciliation of income taxes on continuing operations at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):
| 2021 |  | 2020 |  | 2019
| Amount |  | % of EBT |  | Amount |  | % of EBT |  | Amount |  | % of EBT
Earnings from continuing operations before income taxes (“EBT”) | $ | 1,335 |  |  |  |  | $ | 339 |  |  |  |  | $ | 634 |  |  |
Income taxes at statutory rate | $ | 280 |  |  | 21 | % |  | $ | 71 |  |  | 21 | % |  | $ | 133 |  |  | 21 | %
Effect of: |  |  |  |  |  |  |  |  |  |  |
Employee stock ownership plan dividend paid deduction | (16) |  |  | (1 | %) |  | (2) |  |  | (1 | %) |  | (3) |  |  | — | %
Stock-based compensation | (13) |  |  | (1 | %) |  | (4) |  |  | (1 | %) |  | (7) |  |  | (1 | %)
Tax exempt interest | (8) |  |  | (1 | %) |  | (10) |  |  | (3 | %) |  | (11) |  |  | (2 | %)
Change in valuation allowance | (4) |  |  | — | % |  | (117) |  |  | (35 | %) |  | 17 |  |  | 3 | %
Dividend received deduction | (2) |  |  | — | % |  | (2) |  |  | (1 | %) |  | (3) |  |  | — | %
Adjustment to prior year taxes | (1) |  |  | — | % |  | 1 |  |  | — | % |  | (2) |  |  | — | %
Tax benefit related to sale of Neon | — |  |  | — | % |  | (72) |  |  | (21 | %) |  | — |  |  | — | %
Nondeductible expenses | 8 |  |  | 1 | % |  | 4 |  |  | 1 | % |  | 8 |  |  | 1 | %
Foreign operations | — |  |  | — | % |  | 149 |  |  | 44 | % |  | 4 |  |  | 1 | %
Other | 10 |  |  | — | % |  | 7 |  |  | 3 | % |  | 7 |  |  | — | %
Provision for income taxes as shown in the statement of earnings | $ | 254 |  |  | 19 | % |  | $ | 25 |  |  | 7 | % |  | $ | 143 |  |  | 23 | %
Components of income tax provision (credit) | The total income tax provision of continuing operations consists of (in millions):
| 2021 |  | 2020 |  | 2019
Current taxes: |  |  |  |  |
Federal | $ | 162 |  |  | $ | 46 |  |  | $ | 103 |
State | 7 |  |  | 4 |  |  | 5 |
Foreign | 1 |  |  | 3 |  |  | 2 |
Deferred taxes: |  |  |  |  |
Federal | 84 |  |  | (28) |  |  | 33 |
Provision for income taxes | $ | 254 |  |  | $ | 25 |  |  | $ | 143 |
Summary of operating loss carryforwards | For income tax purposes, AFG and its subsidiaries had the following carryforwards available at December 31, 2021 (in millions):
| Expiring |  | Amount |
Operating Loss – U.S. | 2022 - 2041 |  | $ | 56 |  |
Operating Loss – United Kingdom | indefinite |  | 37 |  | (*)
(*)£28 million
Components of deferred tax assets and liabilities | The significant components of deferred tax assets and liabilities of continuing operations included in AFG’s Balance Sheet at December 31 were as follows (in millions):
| 2021 |  | 2020
Deferred tax assets: |  |  |
Federal net operating loss carryforwards | $ | 12 |  |  | $ | 15 |
Foreign underwriting losses | 9 |  |  | 6 |
Capital loss carryforwards | — |  |  | 7 |
Insurance claims and reserves | 249 |  |  | 240 |
Employee benefits | 112 |  |  | 102 |
Other, net | 26 |  |  | 45 |
Total deferred tax assets before valuation allowance | 408 |  |  | 415 |
Valuation allowance against deferred tax assets | (25) |  |  | (29) |
Total deferred tax assets | 383 |  |  | 386 |
Deferred tax liabilities: |  |  |
Investment securities | (200) |  |  | (129) |
Deferred policy acquisition costs | (61) |  |  | (55) |
Insurance claims and reserves transition liability | (17) |  |  | (21) |
Real estate, property and equipment | (29) |  |  | (33) |
Total deferred tax liabilities | (307) |  |  | (238) |
Net deferred tax asset | $ | 76 |  |  | $ | 148 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
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