Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 8—Income Taxes

The following table discloses significant components of income taxes for each year presented:

	Year Ended December 31,
	2021		2020		2019
Income tax expense (benefit) from continuing operations:
Current income tax expense (benefit)	$	144,718	$	129,647	$	134,948
Deferred income tax expense (benefit)	22,713		35,264		35,449
	167,431		164,911		170,397
Shareholders’ equity:
Other comprehensive income (loss)	(93,480)		314,845		405,472
	$	73,951	$	479,756	$	575,869

In each of the years 2019 through 2021, deferred income tax expense (benefit) was incurred because of certain differences between net income before income tax expense (benefit) as reported on the Consolidated Statements of Operations and taxable income as reported on Globe Life's income tax returns. As explained in Note 1—Significant Accounting Policies, these differences caused the consolidated financial statement book values of some assets and liabilities to be different from their respective tax bases.

The effective income tax rate differed from the expected U.S. federal statutory rate of 21% as shown below:

	Year Ended December 31,
	2021		%	2020		%	2019		%
Expected federal income tax expense (benefit)	$	191,602	21.0	$	188,304	21.0	$	195,569	21.0
Increase (reduction) in income taxes resulting from:
Low income housing investments	(12,115)		(1.3)	(11,913)		(1.3)	(11,605)		(1.2)
Share-based awards	(5,597)		(0.6)	(5,013)		(0.6)	(11,780)		(1.3)
Tax-exempt investment income	(6,977)		(0.8)	(5,830)		(0.6)	(3,192)		(0.3)
Other	518		0.1	(637)		(0.1)	1,405		0.1
Income tax expense (benefit)	$	167,431	18.4	$	164,911	18.4	$	170,397	18.3

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	December 31,
	2021		2020
Deferred tax assets:
Fixed maturity investments	$	—	$	4,279
Carryover of tax losses	5,962		5,534
Total gross deferred tax assets	5,962		9,813
Deferred tax liabilities:
Unrealized gains	713,879		808,071
Employee and agent compensation	93,738		88,012
Deferred acquisition costs	723,337		688,034
Future policy benefits, unearned and advance premiums, and policy claims	226,943		257,640
Other liabilities	15,738		7,209
Total gross deferred tax liabilities	1,773,635		1,848,966
Net deferred tax liability	$	1,767,673	$	1,839,153

Income Tax Return: Globe Life Inc. and its subsidiaries file a life-nonlife consolidated federal income tax return. The statutes of limitations for the Internal Revenue Service's examination and assessment of additional tax are closed for all tax years prior to 2018 with respect to Globe Life's consolidated federal income tax returns. Management concludes that adequate provision has been made in the consolidated financial statements for any potential assessments that may result from current or future tax examinations and other tax-related matters for all open years.

Valuations: Globe Life has a $28.4 million net operating loss (NOL) carryforward at December 31, 2021, of which $18.8 million was created prior to 2018 and will begin to expire in 2032 if not otherwise used to offset future taxable income. The remaining NOL carryforward of $9.6 million may be carried forward indefinitely. A valuation allowance is to be recorded when it is more likely than not that deferred tax assets will not be realized by the Company. No valuation allowance has been recorded relating to Globe Life's deferred tax assets as management has determined that Globe Life will more likely than not have sufficient taxable income in future periods to fully realize its existing deferred tax assets.

Globe Life's tax liability is adjusted to include a provision for uncertain tax positions taken or expected to be taken in a tax return. However, during the years 2019 through 2021, Globe Life did not have any uncertain tax positions which resulted in unrecognized tax benefits.

Tax penalties and interest: Globe Life's continuing practice is to recognize penalties and interest related to income tax matters in income tax expense. The Company recognized interest income of $0 thousand, $0 thousand, and $55 thousand, net of federal income tax expense, in its Consolidated Statements of Operations for 2021, 2020, and 2019, respectively. The Company had no accrued interest or penalties at December 31, 2021 or 2020.