
	Years Ended December 31,
	2020		2019		2018
	(In millions)
Current:
U.S. federal	$	271	$	(189)	$	(207)
U.S. state and local	27		4		11
Non-U.S.	882		850		932
Subtotal	1,180		665		736
Deferred:
U.S. federal	(115)		(235)		342
U.S. state and local	1		—		—
Non-U.S.	443		456		101
Subtotal	329		221		443
Provision for income tax expense (benefit)	$	1,509	$	886	$	1,179


	Years Ended December 31,
	2020		2019		2018
	(In millions)
Tax provision at U.S. statutory rate	$	1,455	$	1,427	$	1,325
Tax effect of:
Dividend received deduction	(34)		(37)		(35)
Tax-exempt income	(45)		(64)		(29)
Prior year tax (1), (2)	(27)		(179)		(197)
Low income housing tax credits	(202)		(254)		(284)
Other tax credits	(45)		(52)		(79)
Foreign tax rate differential (3), (4), (5)	414		395		335
Change in valuation allowance	(5)		(22)		(2)
U.S. Tax Reform impact (6), (7)	—		(326)		78
Other, net (8)	(2)		(2)		67
Provision for income tax expense (benefit)	$	1,509	$	886	$	1,179

(3)For the year ended December 31, 2020, foreign tax rate differential includes tax charges of $60 million and $24 million related to the sales of MetLife Seguros de Retiro and MetLife Russia, respectively, and $43 million related to the U.S. tax on Global Intangible Low-Taxed Income (“GILTI”). See Note 3 for information on the Company’s business dispositions.

(4)For the year ended December 31, 2019, foreign tax rate differential includes tax charges of $61 million from the definitive agreement to sell MetLife Hong Kong and $12 million related to GILTI, of which $35 million is a current year charge offset by a $23 million tax benefit revising the 2018 estimate. See Note 3 for information on the disposition of MetLife Hong Kong.

(7)For the year ended December 31, 2018, U.S. Tax Reform impact includes a $468 million tax charge related to the deemed repatriation transition tax, offset by a $390 million tax benefit related to the adjustment of deferred taxes due to the U.S. tax rate change. This excludes $12 million of tax provision at the U.S. statutory rate for a total tax reform charge of $66 million.

(8)For the year ended December 31, 2018, other includes tax charges of $69 million related to the non-deductible loss incurred on the mark-to-market and exchange of FVO Brighthouse Common Stock and $18 million related to a non-deductible Patient Protection and Affordable Care Act excise tax, offset by a tax benefit of $36 million related to a non-cash transfer of assets from a wholly-owned U.K. subsidiary to its U.S. parent.

In December 2017, U.S. Tax Reform was signed into law. U.S. Tax Reform includes numerous changes in tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, which took effect for taxable years beginning on or after January 1, 2018. U.S. Tax Reform moves the United States from a worldwide tax system to a participation exemption system by providing corporations a 100% dividends received deduction for dividends distributed by a controlled foreign corporation. To transition to that new system, U.S. Tax Reform imposed a one-time deemed repatriation tax on unremitted earnings and profits at a rate of 8.0% for illiquid assets and 15.5% for cash and cash equivalents.

The Company recorded estimates of the impacts of U.S. Tax Reform in the period of enactment, the fourth quarter of 2017. In 2018, these estimates were updated in accordance with SAB 118. However, the impact of certain provisions of U.S. Tax Reform remains uncertain. For instance, many regulations under the new law have not been finalized or have only recently been finalized, including certain rules on international taxation. As a result, the Company continued to report additional revisions resulting from U.S. Tax Reform in 2019.


	Years Ended December 31,
	2019		2018
	(In millions)
Income (loss) before provision for income tax	$	—	$	(58)
Provision for income tax expense (benefit):
Deemed repatriation	(317)		468
Deferred tax revaluation	(9)		(402)
Total provision for income tax expense (benefit)	(326)		66
Income (loss), net of income tax	326		(124)
Increase to net equity from U.S. Tax Reform	$	326	$	(124)

In accordance with SAB 118, the Company recorded provisional amounts for certain items for which the income tax accounting was not complete. For these items, the Company recorded a reasonable estimate of the tax effects of U.S. Tax Reform. The estimates were reported as provisional amounts during the measurement period, which did not exceed one year from the date of enactment of U.S. Tax Reform. In 2018, the Company reflected adjustments to its provisional amounts upon obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of the enactment date that, if known, would have affected the income tax effects initially reported as provisional amounts. While the SAB 118 provisional measurement period ended December 31, 2018, the Company continued to revise certain U.S. Tax Reform amounts in 2019.

As of December 31, 2017, the following items were considered provisional estimates due to complexities and ambiguities in U.S. Tax Reform which resulted in incomplete accounting for the tax effects of these provisions. Further guidance, either legislative or interpretive, and analysis were completed and updates were made to complete the accounting for these items during the measurement period as of December 31, 2018 and subsequent to the measurement period as of December 31, 2019:

•Deemed Repatriation Transition Tax - In 2018, the IRS issued proposed regulations related to the transition tax. As a result, for the year ended December 31, 2018, the Company recorded a $468 million charge. In 2019, as a result of executing a binding agreement with the IRS, the Company recorded a tax benefit of $317 million to settle this matter. This agreement resolved uncertainty regarding the taxation of certain dividends from certain foreign subsidiaries paid prior to U.S. Tax Reform.

•GILTI - U.S. Tax Reform imposes a minimum tax on GILTI, which is generally the excess income of foreign subsidiaries over a 10% rate of routine return on tangible business assets. In 2018, the Company established an accounting policy in which it treats taxes due on GILTI as a current-period expense when incurred. Accordingly, the Company recorded tax charges of $43 million, $12 million and $45 million related to this income for the periods ended December 31, 2020, 2019 and 2018, respectively.

•Alternative Minimum Tax Credits - U.S. Tax Reform eliminates the corporate alternative minimum tax and allows for minimum tax credit carryforwards to be used to offset future regular tax or to be refunded 50% each tax year beginning in 2018, with any remaining balance fully refunded in 2021. However, pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued for corporations claiming refundable prior year alternative minimum tax credits are subject to a sequestration rate of 6.2%. The application of this fee to refunds in future years is subject to further guidance. Additionally, the sequestration reduction rate in effect at the time is subject to uncertainty. For the year ended December 31, 2018, the Company determined that no additional adjustment was required. In early 2019, the IRS issued guidance indicating that for years beginning after December 31, 2017, refund payments and credit elect and refund offset transactions due to refundable alternative minimum tax credits will not be subject to the sequestration fee. Accordingly, to reflect this guidance the Company recorded a $9 million tax benefit in 2019.

•Tax Credit Partnerships - The reduction in the federal corporate income tax rate due to U.S. Tax Reform required adjustments for multiple investment portfolios, including tax credit partnerships and tax-advantaged leveraged leases. Certain tax credit partnership investments derive returns in part from income tax credits. The Company recognizes changes in tax attributes at the partnership level when reported by the investee in its financial information. The Company did not receive the necessary investee financial information to determine the impact of U.S. Tax Reform on the tax attributes of its tax credit partnership investments until the third quarter of 2018. Accordingly, prior to the third quarter of 2018, the Company applied prior law to these equity method investments in accordance with SAB 118. For the year ended December 31, 2018, after receiving additional investee information, a reduction in tax credit partnerships’ equity method income of $46 million, net of income tax, was included in net investment income. The tax-advantaged leveraged lease portfolio is valued on an after-tax yield basis. In 2018, the Company received third party data that was used to complete a comprehensive review of its portfolio to determine the full and complete impact of U.S. Tax Reform on these investments. As a result of this review, a tax benefit of $125 million was recorded for the year ended December 31, 2018. No additional adjustment was required for the years ended December 31, 2020 and 2019.

U.S. Tax Reform required the Company to recognize a transition tax on all previously unremitted non-U.S. earnings. However, the Company has not provided for U.S. deferred taxes on the remaining excess of book bases over tax bases of certain investments in non-U.S. subsidiaries that are essentially permanent in duration. The amount of deferred tax liability related to the Company’s remaining basis difference in these non-U.S. subsidiaries is $281 million at December 31, 2020.


	December 31,
	2020		2019
	(In millions)
Deferred income tax assets:
Policyholder liabilities and receivables	$	3,890	$	3,635
Net operating loss carryforwards (1)	301		240
Employee benefits	673		692
Capital loss carryforwards	9		10
Tax credit carryforwards (2)	922		1,296
Litigation-related and government mandated	126		151
Other	—		127
Total gross deferred income tax assets	5,921		6,151
Less: Valuation allowance (1)	309		294
Total net deferred income tax assets	5,612		5,857
Deferred income tax liabilities:
Investments, including derivatives	4,421		4,170
Intangibles	1,387		1,181
Net unrealized investment gains	7,422		6,226
DAC	3,162		3,312
Other	134		—
Total deferred income tax liabilities	16,526		14,889
Net deferred income tax asset (liability) (3)	$	(10,914)	$	(9,032)

(1)The Company has recorded a deferred tax asset of $301 million related to U.S. state and non-U.S. net operating loss carryforwards and an offsetting valuation allowance for the year ended December 31, 2020. Certain net operating loss carryforwards will expire between 2021 and 2040, whereas others have an unlimited carryforward period.

(3)On the consolidated balance sheet for the years ended December 31, 2020 and 2019, $11,008 million and $9,097 million, respectively, is reported in Deferred income tax liability for jurisdictions in a net deferred income tax liability position and $94 million and $65 million, respectively, of a deferred income tax asset is reported in Other assets for jurisdictions in a net deferred income tax asset position.

The Company files income tax returns with the U.S. federal government and various U.S. state and local jurisdictions, as well as non-U.S. jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state, or local income tax examinations for years prior to 2010. For tax years 2007 through 2009, the Company has established adequate reserves for payment of tax liabilities resulting from the completed IRS audit of 2007-2009 which is expected to be settled in 2021. In material non-U.S. jurisdictions, the Company is no longer subject to income tax examinations for years prior to 2013.

The Company filed refund claims in 2017 with the IRS for 2000 through 2002 to recover tax and interest predominantly related to the disallowance of certain foreign tax credits for which the Company received a statutory notice of deficiency in 2015 and paid the tax thereon. The disallowed foreign tax credits relate to certain non-U.S. investments held by MLIC in support of its life insurance business through a United Kingdom investment subsidiary that was structured as a joint venture until early 2009. In 2020, the Company received refunds from these claims filed in 2017, and as a result, the Company recorded a $28 million interest benefit ($22 million, net of tax) included in other expenses.

For tax years 2000 through 2002 and tax years 2007 through 2009, the Company entered into binding agreements with the IRS in 2019 under which all remaining issues regarding the foreign tax credit matter noted above were resolved. Accordingly, in 2019, the Company recorded a non-cash benefit to net income of $226 million, net of tax, comprised of a $158 million tax benefit recorded in provision for income tax expense (benefit) and a $86 million interest benefit ($68 million, net of tax) included in other expenses. For tax years 2003 through 2006, the Company entered into binding agreements with the IRS in 2018 under which all remaining issues, including the foreign tax credit matter noted above, were resolved. Accordingly, in 2018, the Company recorded a non-cash benefit to net income of $349 million, net of tax, comprised of a $168 million tax benefit recorded in provision for income tax expense (benefit) and a $229 million interest benefit ($181 million, net of tax) included in other expenses.

The Company’s overall liability for unrecognized tax benefits may increase or decrease in the next 12 months. For example, U.S. federal tax legislation and regulation could impact unrecognized tax benefits. A reasonable estimate of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of income tax matters could impact the Company’s effective tax rate for a particular future period.


	Years Ended December 31,
	2020		2019		2018
	(In millions)
Balance at January 1,	$	256	$	1,111	$	1,102
Additions for tax positions of prior years (1)	16		6		269
Reductions for tax positions of prior years (2)	(1)		(493)		(195)
Additions for tax positions of current year (1)	12		13		226
Reductions for tax positions of current year	—		—		(3)
Settlements with tax authorities (3)	(1)		(381)		(288)
Lapses of statute of limitations	(10)		—		—
Balance at December 31,	$	272	$	256	$	1,111
Unrecognized tax benefits that, if recognized, would impact the effective rate	$	203	$	194	$	1,046