Income Taxes

3 Months Ended

Mar. 31, 2021

INCOME TAXES

The information in the note below has been updated to reflect the retrospective accounting change described in Note 1.

Income tax expense was $159 million for the three months ended March 31, 2021, compared to income tax expense of $73 million in the same period of 2020. For the three months ended March 31, 2021, the increase in tax expense from the prior period is due to overall higher level of earnings.

The following table summarizes the difference between income tax expense (benefit) at the U.S. statutory rate of 21% and the income tax expense (benefit) at effective worldwide tax rates for the respective periods:


	Three Months Ended March 31,
Millions of dollars		2021		2020
Earnings before income taxes		$	599	$	222

Income tax expense computed at United States statutory tax rate		126		47
Valuation allowances		3		1
U.S. foreign income items, net of credits		7		3
Other		23		22
Income tax expense (benefit) computed at effective worldwide tax rates		$	159	$	73

At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary.

Other Income Tax Matters

During its examination of Whirlpool’s 2009 U.S. federal income tax return, the IRS asserted that income earned by a Luxembourg subsidiary via its Mexican branch should be recognized as income on its 2009 U.S. federal income tax return. The Company believed the proposed assessment was without merit and contested the matter in United States Tax Court (US Tax Court). Both Whirlpool and the IRS moved for partial summary judgment on this issue. On May 5, 2020, the US Tax Court granted the IRS’s motion for partial summary judgment and denied Whirlpool’s. The Company has appealed the US Tax Court decision to the United States Sixth Circuit Court of Appeals. The Company believes that it will be successful upon appeal and has not recorded any impact of the US Tax Court’s decision in its consolidated financial statements.

- 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.

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