Income Tax

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

22. Income Tax

The provision for income tax was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In millions)
Current:
U.S. federal	$	381	$	159	$	62
U.S. state and local	46		45		38
Non-U.S.	1,240		1,074		795
Subtotal	1,667		1,278		895
Deferred:
U.S. federal	(591)		1,234		872
U.S. state and local	(4)		—		(2)
Non-U.S.	(512)		(1,450)		(123)
Subtotal	(1,107)		(216)		747
Provision for income tax expense (benefit)	$	560	$	1,062	$	1,642

The Company’s income (loss) before income tax expense (benefit) was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In millions)
Income (loss):
U.S.	$	(95)	$	5,785	$	4,924
Non-U.S.	2,257		579		3,594
Total	$	2,162	$	6,364	$	8,518

The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In millions)
Tax provision at U.S. statutory rate	$	454	$	1,337	$	1,789
Tax effect of:
Dividend received deduction	(18)		(20)		(40)
Tax-exempt income	(34)		15		(36)
Prior year tax (1)	(12)		(15)		(127)
Low income housing tax credits	(116)		(143)		(178)
Other tax credits	(39)		(44)		(46)
Foreign tax rate differential (2), (3), (4)	312		(85)		275
Changes in tax law (5)	(198)		—		—
Change in valuation allowance (5)	187		—		1
Other, net	24		17		4
Provision for income tax expense (benefit)	$	560	$	1,062	$	1,642

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(1)As discussed further below, prior year tax primarily includes non-cash benefits related to uncertain tax positions of $32 million and $117 million for the years ended December 31, 2022 and 2021, respectively.

(2)For the year ended December 31, 2023, foreign tax rate differential includes tax charges of $28 million related to the pending disposition of MetLife Malaysia and $22 million related to the U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) of which $28 million is a current year charge, offset by a $6 million tax benefit revising the 2022 estimate. See Note 3 for further information on the Company’s business dispositions.

(3)For the year ended December 31, 2022, foreign tax rate differential includes tax charges of $12 million related to the U.S. tax on GILTI of which $33 million is a current year charge, offset by a $21 million tax benefit revising the 2021 estimate.

(4)For the year ended December 31, 2021, foreign tax rate differential includes tax charges of $50 million related to the disposition of MetLife Poland and Greece, $41 million related to the sale of MetLife Seguros and $30 million related to the U.S. tax on GILTI, which included a $42 million 2021 charge, offset by a $12 million tax benefit revising the 2020 estimate. See Note 3 for information on the Company’s business dispositions.

(5)For the year ended December 31, 2023, changes in tax law include tax benefits of $198 million and a change in valuation allowance includes a tax charge of $198 million related to adjustments of deferred taxes due to the enactment of the Bermuda Corporate Income Tax (“BCIT”), as discussed further below.

Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:

	December 31,
	2023		2022
	(In millions)
Deferred income tax assets:
Policyholder liabilities and receivables	$	3,476	$	758
Net operating loss carryforwards (1)	256		238
Employee benefits	523		475
Capital loss carryforwards	29		15
Tax credit carryforwards (2)	82		590
Net unrealized investment losses	4,308		5,946
Litigation-related and government mandated	101		90
Other	393		67
Total gross deferred income tax assets	9,168		8,179
Less: Valuation allowance (1)	496		291
Total net deferred income tax assets	8,672		7,888
Deferred income tax liabilities:
Investments, including derivatives	2,054		1,691
Intangibles	1,004		1,096
DAC	3,929		3,612
Total deferred income tax liabilities	6,987		6,399
Net deferred income tax asset (liability)	$	1,685	$	1,489

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(1)The Company has recorded a deferred tax asset of $256 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, 2023. Certain net operating loss carryforwards will expire between 2024 and 2042, whereas others have an unlimited carryforward period. The Company’s deferred tax asset for the year ended December 31, 2023 includes $198 million recognized due to the BCIT with an offsetting valuation allowance as management believes it is more likely than not that the deferred tax asset will not be realized.

(2)Tax credit carryforwards for the year ended December 31, 2023 primarily reflect foreign tax credits which have no expiration date.

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 was $223 million at December 31, 2023.

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 Internal Revenue Service (“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 2017. In material non-U.S. jurisdictions, the Company is no longer subject to income tax examinations for years prior to 2016.

In 2022, the IRS began a federal income tax audit of MetLife, Inc. and subsidiaries for tax years 2017-2019. The audit is ongoing and to date, no material issues have been raised and no adjustments have been proposed.

In 2021, the Company filed amended federal income tax returns with the IRS for MetLife, Inc. and subsidiaries for tax years 2014 through 2016. In 2022, the IRS reviewed and acknowledged acceptance of the 2014 through 2016 amended federal income tax returns and closed the years to further audit. Accordingly, in 2022, the Company recorded a non-cash benefit to net income of $70 million, net of income tax, comprised of a $67 million tax benefit recorded in provision for income tax expense (benefit) and a $4 million interest benefit ($3 million, net of income tax) included in other expenses.

In 2021, the Company filed amended federal income tax returns with the IRS for MetLife, Inc. and subsidiaries for tax years 2010 through 2013. In 2021, the IRS reviewed and acknowledged acceptance of the 2010 through 2013 amended federal income tax returns and closed the years to further audit. Accordingly, in 2021, the Company recorded a non-cash benefit to net income of $53 million in provision for income tax expense (benefit). In addition, in 2021, the IRS concluded its federal income tax audit of American Life for tax years 2010 through 2013. Accordingly, in 2021, the Company recorded a non-cash benefit to net income of $42 million, net of income tax, comprised of a $34 million tax benefit recorded in provision for income tax expense (benefit) and a $10 million interest benefit ($8 million, net of income 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.

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In millions)
Balance at January 1,	$	129	$	163	$	272
Additions for tax positions of prior years	27		42		19
Reductions for tax positions of prior years (1)	(30)		(93)		(112)
Additions for tax positions of current year	5		22		5
Reductions for tax positions of current year	—		(3)		(18)
Settlements with tax authorities	—		(2)		(3)
Balance at December 31,	$	131	$	129	$	163
Unrecognized tax benefits that, if recognized, would impact the effective rate	$	90	$	80	$	103

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(1)    For the years ended December 31, 2022 and 2021, primarily includes reductions related to non-cash benefits from tax audit settlements.

The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses.

Interest was as follows:

	Years Ended December 31,
	2023		2022		2021
	(In millions)
Interest expense (benefit) recognized on the consolidated statements of operations (1)	$	7	$	—	$	(36)
			December 31,
			2023		2022
			(In millions)
Interest included in other liabilities on the consolidated balance sheets			$	22	$	15

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(1)    For the year ended December 31, 2021, the interest benefit is primarily related to a tax audit settlement of $10 million which was recorded in other expenses and a reclassification of $26 million to current income tax payable.