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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Ford Motor Credit Company LLC and certain of its subsidiaries are disregarded entities for United States income tax purposes. Ford’s consolidated United States federal and state income tax returns include certain of our domestic subsidiaries. In accordance with the adoption of ASU 2019-12, United States income tax liabilities are only recognized for Ford Credit taxable entities. Certain United States minimum taxes, such as global intangible low-taxed income tax, are generally allocated to us on a separate return basis calculated as if we were a taxable entity. The net minimum tax liability allocated to us will not exceed the net liability as determined on a consolidated basis. All prior periods presented have been adjusted to reflect the adoption of ASU 2019-12.

We account for United States tax on global intangible low-taxed income in the period incurred.

Components of Income Taxes
201920202021
Income before income taxes (in millions)
United States$2,160 $2,085 $3,736 
Non-United States838 523 995 
Total$2,998 $2,608 $4,731 

Provision for/(Benefit from) income taxes for the years ended December 31 was estimated as follows (in millions):
201920202021
Current
Federal$107 $94 $47 
Non-United States165 98 21 
State and local17 17 (5)
Total current289 209 63 
Deferred
Federal— — (16)
Non-United States89 61 163 
State and local— — — 
Total deferred89 61 147 
Provision for/(Benefit from) income taxes $378 $270 $210 

Reconciliation of effective tax rate
201920202021
United States statutory tax rate21.0 %21.0 %21.0 %
Effect of (in percentage points):
United States Disregarded Entities (ASU 2019-12)(11.4)(13.5)(15.2)
Non-United States tax rates under United States rate1.3 1.1 1.1 
State and local income taxes0.6 0.6 (0.1)
Prior year settlements and claims0.9 — (1.7)
Other0.2 1.2 (0.7)
Effective tax rate12.6 %10.4 %4.4 %
NOTE 10. INCOME TAXES (Continued)

At December 31, 2021, $4.7 billion of non-United States earnings are considered indefinitely reinvested in operations outside the United States, for which deferred taxes have not been provided. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested basis differences is not practicable.

Valuation of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be recovered or paid.

Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of events that have been recognized in our financial statements or tax returns and their future probability. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance.

Components of Deferred Tax Assets and Liabilities

Components of deferred tax assets and liabilities at December 31 were as follows (in millions):
20202021
Deferred tax assets
Net operating loss carryforwards$282 $293 
Provision for/(Benefit from) credit losses65 58 
Other foreign218 199 
Employee benefit plans22 20 
Other1 42 
Total gross deferred tax assets588 612 
Less: Valuation allowance(65)(65)
Total net deferred tax assets523 547 
Deferred tax liabilities
Leasing transactions451 597 
Other foreign405 428 
Other5 8 
Total deferred tax liabilities861 1,033 
Net deferred tax liability$338 $486 

At December 31, 2021, we have a valuation allowance of $65 million for deferred tax assets primarily related to our South American operations.

Net operating loss carryforwards for tax purposes were $761 million at December 31, 2021, resulting in a deferred tax asset of $293 million. A substantial portion of these losses will begin to expire beyond 2028. Tax benefits of net operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances.
NOTE 10. INCOME TAXES (Continued)

Other

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 was as follows (in millions):
20202021
Beginning balance$70 $70 
Increase - tax positions in prior periods17 17 
Increase - tax positions in current period2 1 
Decrease - tax positions in prior periods(20)(17)
Settlements— — 
Lapse of statute of limitations— (7)
Foreign currency translation adjustments1 (5)
Ending balance$70 $59 

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $70 million and $59 million as of December 31, 2020 and 2021, respectively.

Examinations by tax authorities have been completed through 2012 in Germany, 2016 in Canada and the United States, and 2019 in the United Kingdom. We have settled our United States federal income tax matters related to tax years prior to 2014 in accordance with our intercompany tax sharing agreement with Ford.

We recognize income tax-related penalties in Provision for/(Benefit from) income taxes on our consolidated income statements.  We recognize accrued interest expense related to unrecognized tax benefits in jurisdictions where we file tax returns separate from Ford in Other income/(loss), net on our consolidated income statements. For the years ended December 31, 2019, 2020, and 2021, we recorded net tax related interest expense of $1 million, $1 million, and net tax related interest income of $1 million, respectively, in our consolidated income statements. At December 31, 2020 and 2021, we recorded a net receivable of $3 million and $6 million, respectively, for tax related interest in Other Assets.

Cash paid for income taxes was $524 million, $583 million, and $133 million in 2019, 2020, and 2021, respectively.