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Income Taxes
 12 Months Ended
Dec. 31, 2022
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 on January 1, 2021, United States income tax liabilities are only recognized for Ford Credit taxable entities. Certain United States minimum taxes, such as tax on global intangible low-taxed income, 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.

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

Components of Income Taxes
202020212022
Income before income taxes (in millions)
United States$2,085 $3,736 $1,532 
Non-United States523 995 905 
Total$2,608 $4,731 $2,437 

Provision for/(Benefit from) income taxes for the years ended December 31 was estimated as follows (in millions):
202020212022
Current
Federal$94 $47 $81 
Non-United States98 21 31 
State and local17 (5)12 
Total current209 63 124 
Deferred
Federal— (16)(17)
Non-United States61 163 341 
State and local— — — 
Total deferred61 147 324 
Provision for/(Benefit from) income taxes $270 $210 $448 

Reconciliation of effective tax rate
202020212022
United States statutory tax rate21.0 %21.0 %21.0 %
United States Disregarded Entities (ASU 2019-12)(13.5)(15.2)(8.9)
Non-United States tax rate differential1.1 1.1 0.7 
Nontaxable currency gains and losses— — 4.5 
State and local income taxes0.6 (0.1)0.4 
Prior year settlements and claims— (1.7)0.8 
Other1.2 (0.7)(0.1)
Effective tax rate10.4 %4.4 %18.4 %
NOTE 10. INCOME TAXES (Continued)

At December 31, 2022, $3.0 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):
20212022
Deferred tax assets
Net operating loss carryforwards$293 $216 
Provision for/(Benefit from) credit losses58 45 
Other foreign199 113 
Employee benefit plans20 16 
Other42 12 
Total gross deferred tax assets612 402 
Less: Valuation allowance(65)(54)
Total net deferred tax assets547 348 
Deferred tax liabilities
Leasing transactions597 668 
Other foreign428 441 
Other8 2 
Total deferred tax liabilities1,033 1,111 
Net deferred tax liability$486 $763 

At December 31, 2022, we have a valuation allowance of $54 million for certain non-United States deferred tax assets.

Net operating loss carryforwards for tax purposes were $487 million at December 31, 2022, resulting in a deferred tax asset of $216 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):
20212022
Beginning balance$70 $59 
Increase - tax positions in prior periods17 2 
Increase - tax positions in current period1 — 
Decrease - tax positions in prior periods(17)(1)
Settlements— — 
Lapse of statute of limitations(7)(1)
Foreign currency translation adjustments(5)(1)
Ending balance$59 $58 

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $59 million and $58 million as of December 31, 2021 and 2022, respectively.

Examinations by tax authorities have been completed through 2012 in Germany, 2014 in the United States, 2017 in Canada, and 2020 in the United Kingdom. We have settled our United States federal income tax matters related to tax years prior to 2015 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, 2020, 2021, and 2022, we recorded net tax related interest expense of $1 million, net tax related interest income of $1 million, and net tax related interest expense of $1 million, respectively, on our consolidated income statements. At December 31, 2021 and 2022, we recorded a net receivable of $6 million for tax related interest in Other Assets.

Cash paid for income taxes was $583 million, $133 million, and $416 million in 2020, 2021, and 2022, respectively.