INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

The income tax expense (benefit) for the years ended December 31, 2022, 2021 and 2020 consists of the following (in millions):


	2022		2021		2020
Current:
U.S. Federal	$	2,006	$	1,388	$	839
U.S. State and Local	273		194		100
Non-U.S.	467		478		420
Total Current	2,746		2,060		1,359
Deferred:
U.S. Federal	296		1,311		(725)
U.S. State and Local	136		273		(159)
Non-U.S.	99		61		26
Total Deferred	531		1,645		(858)
Total Income Tax Expense	$	3,277	$	3,705	$	501

Income Before Income Taxes

Income before income taxes includes the following components (in millions):


	2022		2021		2020
United States	$	12,276	$	14,220	$	(39)
Non-U.S.	2,549		2,375		1,883
Total Income Before Income Taxes:	$	14,825	$	16,595	$	1,844

Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate

A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2022, 2021 and 2020 consists of the following:


	2022		2021		2020
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
U.S. state and local income taxes (net of federal benefit) (1)	2.0		2.2		(2.6)
Non-U.S. tax rate differential	0.1		—		1.6
U.S. federal tax credits	(0.5)		(0.4)		(3.6)
Goodwill and other asset impairments	—		—		5.1
Net uncertain tax positions	0.4		0.6		3.6
Other	(0.9)		(1.1)		2.1
Effective income tax rate	22.1	%	22.3	%	27.2	%

Deferred Tax Liabilities and Assets

Deferred income tax assets and liabilities are comprised of the following as of December 31, 2022 and 2021 (in millions):


	2022		2021
Fixed assets and capitalized software	$	(5,819)	$	(5,808)

Operating lease right-of-use assets	(893)		(839)
Other	(708)		(593)
Deferred tax liabilities	(7,420)		(7,240)

Pension and postretirement benefits	637		1,620
Loss and credit carryforwards	242		342
Insurance reserves	603		587

Stock compensation	315		219
Accrued employee compensation	304		453
Operating lease liabilities	948		874
Other	331		318
Deferred tax assets	3,380		4,413
Deferred tax assets valuation allowance	(123)		(122)
Deferred tax asset (net of valuation allowance)	3,257		4,291

Net deferred tax asset (liability)	$	(4,163)	$	(2,949)

Amounts recognized in the consolidated balance sheets:


Deferred tax assets	$	139	$	176
Deferred tax liabilities	(4,302)		(3,125)
Net deferred tax asset (liability)	$	(4,163)	$	(2,949)

U.S. State and Local Operating Loss and Credit Carryforwards

Further, we have U.S. state and local operating loss and credit carryforwards as follows (in millions):


	2022		2021
U.S. state and local operating loss carryforwards	$	653	$	924
U.S. state and local credit carryforwards	$	46	$	90

Summarized Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to our uncertain tax positions (in millions):


	Tax		Interest		Penalties
Balance as of January 1, 2020	$	172	$	52	$	4
Additions for tax positions of the current year	61		—		—
Additions for tax positions of prior years	154		34		2
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(54)		(24)		(2)
Settlements during the period	—		(1)		—
Lapses of applicable statute of limitations	—		—		—
Balance as of December 31, 2020	333		61		4
Additions for tax positions of the current year	85		—		—
Additions for tax positions of prior years	107		23		—
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(42)		(4)		(2)
Settlements during the period	(3)		(2)		—
Lapses of applicable statute of limitations	—		—		—
Balance as of December 31, 2021	480		78		2
Additions for tax positions of the current year	56		—		—
Additions for tax positions of prior years	25		30		2
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(9)		(1)		—
Settlements during the period	(10)		(1)		—
Lapses of applicable statute of limitations	(9)		(2)		—
Balance as of December 31, 2022	$	533	$	104	$	4