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Income Taxes
 12 Months Ended
Dec. 31, 2024
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. Our provision for income taxes includes only income tax liabilities for Ford Credit entities recognized as taxable within a jurisdiction. 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.

We recognize income tax-related penalties in Provision for/(Benefit from) income taxes on our consolidated income statements.  We recognize income tax-related interest income and interest expense in Other income/(loss), net on our consolidated income statements.

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 carryforwards 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.
NOTE 10. INCOME TAXES (Continued)

Components of Income Taxes

Components of income taxes for the years ended December 31 were as follows:

202220232024
Income before income taxes (in millions)
United States$1,532 $797 $773 
Non-United States905 525 881 
Total$2,437 $1,322 $1,654 
Provision for/(Benefit from) income taxes (in millions)
Current
Federal$81 $190 $(43)
Non-United States31 361 156 
State and local12 10 9 
Total current124 561 122 
Deferred
Federal(17)65 239 
Non-United States (a)341 (627)37 
State and local— (1)— 
Total deferred324 (563)276 
Total$448 $(2)$398 
Reconciliation of effective tax rate
United States statutory tax rate21.0 %21.0 %21.0 %
United States disregarded entities(8.9)4.8 0.5 
Non-United States tax rate differential0.7 (0.9)0.2 
State and local income taxes0.4 0.5 0.4 
Nontaxable foreign currency gains and losses4.5 (1.5)(0.7)
Dispositions and restructurings (a)— (25.9)— 
United States tax on non-United States earnings— — 3.6 
Prior year settlements and claims0.8 (0.8)— 
Other(0.1)2.6 (0.9)
Effective tax rate18.4 %(0.2)%24.1 %
__________
(a)2023 includes a benefit of $343 million associated with legal entity restructuring within our leasing operations.

At December 31, 2024, $4.8 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.
NOTE 10. INCOME TAXES (Continued)

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities at December 31 were as follows (in millions):
20232024
Deferred tax assets
Net operating loss carryforwards$490 $611 
Tax credit carryforwards— 119 
Provision for credit losses139 99 
Other foreign73 111 
Employee benefit plans14 12 
Other54 56 
Total gross deferred tax assets770 1,008 
Less: Valuation allowances(42)(45)
Total net deferred tax assets728 963 
Deferred tax liabilities
Leasing transactions359 692 
Other foreign510 431 
Other6 26 
Total deferred tax liabilities875 1,149 
Net deferred tax liability$147 $186 

Net operating loss carryforwards for tax purposes were $2.2 billion at December 31, 2024, resulting in a deferred tax asset of $611 million. A substantial portion of these losses will begin to expire beyond 2030. Tax credit carryforwards available to offset future tax liabilities are $119 million. These credits have a remaining carryforward period of twenty years. Tax benefits from net operating loss carryforwards 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 available tax planning strategies.

Other

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 was as follows (in millions):
20232024
Beginning balance$58 $69 
Increase - tax positions in prior periods24 14 
Decrease - tax positions in prior periods(15)— 
Settlements(2)(7)
Lapse of statute of limitations(1)(1)
Foreign currency translation adjustments5 (10)
Ending balance$69 $65 

The amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $69 million and $65 million as of December 31, 2023 and 2024, respectively.

Examinations by tax authorities have been completed through 2008 in Germany, 2014 in the United States, and 2018 in Canada and 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.
NOTE 10. INCOME TAXES (Continued)

Net tax-related interest expense on income taxes was $1 million, $12 million, and $3 million for the years ended December 31, 2022, 2023, and 2024, respectively. These were reported in Other income/(loss), net on our consolidated income statements. At December 31, 2023 and 2024, we reported a net tax-related interest payable of $24 million and $23 million, respectively.

Cash paid for income taxes was $416 million, $248 million, and $166 million in 2022, 2023, and 2024, respectively.