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Income Taxes
 12 Months Ended
Dec. 31, 2023
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, Income Taxes - Simplifying the Accounting for Income Taxes, on January 1, 2021, United States income tax liabilities are only recognized for Ford Credit taxable entities. Certain United States minimum taxes, such as the corporate alternative minimum tax and the 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, and we account for investment tax credits using the deferral method.

Components of Income Taxes
202120222023
Income before income taxes (in millions)
United States$3,736 $1,532 $797 
Non-United States995 905 525 
Total$4,731 $2,437 $1,322 

Provision for/(Benefit from) income taxes for the years ended December 31 was estimated as follows (in millions):
202120222023
Current
Federal$47 $81 $190 
Non-United States21 31 361 
State and local(5)12 10 
Total current63 124 561 
Deferred
Federal(16)(17)65 
Non-United States163 341 (627)
State and local— — (1)
Total deferred147 324 (563)
Total$210 $448 $(2)

Reconciliation of effective tax rate
202120222023
United States statutory tax rate21.0 %21.0 %21.0 %
United States Disregarded Entities (ASU 2019-12)(15.2)(8.9)4.8 
Dispositions and restructurings (a)— — (25.9)
Non-United States tax rate differential1.1 0.7 (0.9)
Nontaxable foreign currency gains and losses— 4.5 (1.5)
State and local income taxes(0.1)0.4 0.5 
Prior year settlements and claims(1.7)0.8 (0.8)
Other(0.7)(0.1)2.6 
Effective tax rate4.4 %18.4 %(0.2)%
__________
(a)2023 includes a benefit of $343 million associated with legal entity restructuring within our leasing operations.
NOTE 10. INCOME TAXES (Continued)

At December 31, 2023, $4.9 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):
20222023
Deferred tax assets
Net operating loss carryforwards$216 $490 
Provision for/(Benefit from) credit losses45 139 
Other foreign113 73 
Employee benefit plans16 14 
Other12 54 
Total gross deferred tax assets402 770 
Less: Valuation allowances(54)(42)
Total net deferred tax assets348 728 
Deferred tax liabilities
Leasing transactions668 359 
Other foreign441 510 
Other2 6 
Total deferred tax liabilities1,111 875 
Net deferred tax liability$763 $147 

At December 31, 2023, we have a valuation allowance of $42 million for certain non-United States deferred tax assets.

Net operating loss carryforwards for tax purposes were $1.5 billion at December 31, 2023, resulting in a deferred tax asset of $490 million. A substantial portion of these losses will begin to expire beyond 2029. 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):
20222023
Beginning balance$59 $58 
Increase - tax positions in prior periods2 24 
Increase - tax positions in current period— — 
Decrease - tax positions in prior periods(1)(15)
Settlements— (2)
Lapse of statute of limitations(1)(1)
Foreign currency translation adjustments(1)5 
Ending balance$58 $69 

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $58 million and $69 million as of December 31, 2022 and 2023, respectively.

Examinations by tax authorities have been completed through 2008 in Germany, 2014 in the United States, 2018 in Canada, and 2018 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. Net tax-related interest on income taxes was $1 million of income, $1 million of expense, and $12 million of expense for the years ended December 31, 2021, 2022, and 2023, respectively. At December 31, 2022 and 2023, we recorded a net tax-related receivable of $6 million and a net tax-related payable of $24 million, respectively.

Cash paid for income taxes was $133 million, $416 million, and $248 million in 2021, 2022, and 2023, respectively.